Market Commentary

Actively managed funds represent 7% of REIT market capitalization and they have been a key element in REITs’ long-term success because of their combined real estate and equity investment expertise and analysis.

Timber, office, and data centers led with returns of 15.9%, 10.4%, and 7.3%, respectively.

The City of Austin Employees' Retirement System (COAERS) investment team noted that its real estate allocation could be improved dramatically by adding a portfolio completion strategy of REITs, which was historically implemented solely through an open-ended, core, private markets fund system.

Effective with the 2023: Q2 quarterly review, the FTSE Nareit U.S. Real Estate Index Series has launched a property sector devoted to gaming REITs.

Differences in cap rates capture the divergence that occurred between U.S. public and private real estate markets in 2022, with public real estate cap rates (REIT implied) higher than their private real estate counterparts (transaction and appraisal).

The commercial real estate (CRE) mortgage market has changed dramatically since the end of 2021. For many real estate investors, gone are the days of low-cost, readily available property financing.

With REIT implied capitalization (cap) rates significantly higher than private real estate transaction cap rates, the attractiveness of public equity REITs has increased.

One of the dominant themes among institutional real estate investors over the past few years has been the shift toward “alternative” property types.

The FTSE Nareit All Equity REITs Index posted a total return of 0.3% in April and the FTSE EPRA Nareit Global Extended Index rose 1.5%.

In 2023, four deals to acquire publicly-listed REITs have been announced, with a total deal value of $20.4 billion and 97% of the value reflecting acquisitions by listed REITs.

Skilled nursing facilities (SNFs) that are housed in properties leased from REITs tend to have better quality measures and ratings compared with those that rent non-REIT properties or own their buildings.

GRESB, the Global Real Estate Sustainability Benchmark, has released its 2022 data on environmental stewardship, social responsibility, and good governance for REITs.