Market Commentary

REIT share prices rose slightly during the week ended December 18, with the FTSE Nareit All Equity REITs index posting a weekly total return of 0.5% and a year-to-date return of -6.9%.

CRE markets, and the economy as a whole are bolstered by the solid fundamentals that were in place when the pandemic hit, in sharp contrast to prior recessions.

REIT share prices fell during the week ended December 11, with the FTSE Nareit All Equity REITs index posting a total return of -2.5%.

Most REIT property sectors were up slightly for the week.

The FTSE Nareit All Equity REITs index posted a total return of -1.1% for the week ended Nov. 20, following weekly increases of 4.3% and 6.9% earlier in the month.

Diversified REITs saw FFO swing from negative $102 million in the second quarter to positive $962 million in Q3.

The FTSE Nareit All Equity REITs index posted a total return of 6.9% last week, after a 4.3% gain the week before.

REITs outperformed the broader markets by a wide margin, especially those property sectors that had been most impacted by the shutdowns and social distancing measures.

The pandemic had a significant impact on demand for commercial real estate in the third quarter, resulting in rising vacancy rates and slowing or falling rents and property prices. The impact was uneven across property types, however, with greater effects on office and retail property markets, but smaller or little impact on multifamily and industrial properties.

While REITs have underperformed the broader stock market so far in 2020, it is long-term returns that matter.  REITs have been a favorable choice when looking at long-term returns.

REITs posted declines comparable to those on broad market indices.

The travel industry has been severely impacted by the pandemic, including the lodging/resort REIT sector, but measures to reduce risks of infection have allowed hotels to continue reopening, and occupancy has begun to rise in recent months.