Market Commentary

Roughly 44% of American households are invested in REIT stocks.

Across the various REIT sectors, there were seven property sectors with gains for the week, led by lodging/resorts with a total return of 7.6%.

Demand for apartments looks to be robust post-pandemic, however, as there is one feature of housing that makes it different from retail, office, or hotels: one cannot live and sleep online.

Last week’s decline breaks a string of gains the to prior weeks, but REITs are still up 2.1% month-to-date.

E-commerce surged in the spring, but stores are reopening and curbside pickup is a popular hybrid of online shopping and bricks-and-mortar delivery. Many shoppers enjoy the retail experience and still prefer to check the size, fit, and appearance at a bricks & mortar store.

REITs outperformed most other GICs sectors with only 5.8% of the REIT market cap downgraded. REITs were the third best performing GICS sector by this measure.

This was the second week of rising share prices, after four straight weeks edging lower through September.

The next few years will almost certainly see a move towards less density, and it is unclear how much overall demand for office space will decline due to WFH if there is an offsetting increase in the space per worker.

REITs rallied last week, with the FTSE-Nareit All Equity REITs index posting a total return of 5.5%, trimming the year-to-date decline in total returns to the single digits.

Last week concerns about economic growth and continued consumer resiliency to COVID-19 led to REIT stocks underperforming the broader equity indexes.

Healthy buildings are quickly becoming a “must-have,” panelist Ben Myers says.