Market Commentary

GRESB, an independent organization providing validated sustainability performance data and peer benchmarks for investors and managers, has released its 2023 Real Estate Assessment, which measures the sustainability performance of individual real estate portfolios based on self-reported data.

Data from CoStar highlight the current state of the commercial real estate market.

Space market fundamentals can differ markedly across property types. Net absorption (demand) and net deliveries (supply) for the four traditional property types (retail, apartments, industrial, and office) highlight the ups and downs of the space markets and can illustrate excess net demand (net absorption less net deliveries) for each sector.

The FTSE EPRA Nareit Developed Extended Index fell 4.5% in January, and posted a total return of 16.0% since Oct. 19, 2023.

Nareit research has shown that REIT total returns have tended to bounce back and even surge after periods of significant REIT underperformance relative to private real estate.

No Fed interest rate cuts? No problem: With their disciplined balance sheets, U.S. public equity REITs may not be immune from higher interest rates, but they are reasonably well-insulated from them. 

The FTSE Nareit All Equity REITs Index declined 4.9% in January. Broader markets posted narrow gains as the Russell 1000 rose 1.4% and the Dow Jones U.S. Total Stock Market rose 1.1%.

New research by Nareit estimates that 168 million Americans, or roughly 50% of American households, were invested in REIT stocks in 2023.

The FTSE EPRA Nareit Developed Extended Index rallied in the fourth quarter of 2023 as bond yields declined in the United States and other developed markets.

U.S. REITs raised $5.2 billion from debt and equity offerings in the fourth quarter of 2023; note that this total is preliminary and will be revised upward when ATM program usage data become available.

REITs Rebounded in the Fourth Quarter as Treasury Yields Declined