Expect REITs in California, especially those with office market exposure, to outperform today as the state's Proposition 15 apparently failed, writes Mizuho Securities USA analyst Omotayo Okusanya in a note.
The measure would have required REITs to value commercial property in California at market value rather than their purchase price.
"This development should remove the overhang of increased property taxes for REITs with significant exposure to California," said Okusanya.
Office REITs Douglas Emmett (NYSE:DEI), Hudson Pacific Properties (NYSE:HPP), and Kilroy Realty (NYSE:KRC) should benefit, as well as industrial REIT Rexford Industrial Realty (NYSE:REXR), the analyst said.
Previously: Office REITs also have California Prop 15 to worry about on election day (Nov. 2)
