Joe Rodriguez, manager of Morningstar’s five-star-rated AIM Select Real Estate Fund, sees value in the commercial real estate sector.
He acknowledges that the sector faces major woes, but those woes provide a buying opportunity, he told CNBC.
Rodriguez is bullish on the office and healthcare sectors, partly because of long-term leases there.
“You’re talking about leases generally . . . five to 10 years, sometime longer. These contractual obligations tend to give you a lot of stability when things are tough in the rest of the economy,” he says.
In the office sector Rodriguez likes New York City and Washington, DC. “These areas have lower than average vacancy rates compared to most markets in the country,” he points out.
“The government's been putting a lot of money into. . . financial institutions, so we think New York City will start to see the benefit of that over the near term."
As for the health sector, "Healthcare is somewhat agnostic to the overall economy," Rodriguez says.
"If you have slow growth in GDP, people still need the facilities provided by their medical doctors. . . So we should get stable growth over the next several years out of our healthcare stocks."
Money management titan BlackRock is bullish just like Rodriguez.
“These asset classes (including commercial real estate) have not recovered as strongly as the rest of the market and, therefore, are cheap,” the firm said in a report.