Market Commentary

Last week’s gains trimmed the declines so far this year to single digits, bringing the year-to-date total return to -9.0%

Nearly every recent housing market indicator has shown significant increases for July, and were above consensus expectations.

One of the keys to finding opportunities in the current real estate landscape is by differentiating between transitory and permanent changes in consumer behavior and the use of real estate.

The FTSE Nareit All Equity REITs index was down 0.3% in terms of total return.

Given that rent collections in the industrial, office, and healthcare sectors have stabilized at high levels, the August survey focuses on three property subsectors: apartments, free standing retail, and shopping center retail.

The sharp decline in REIT earnings reflects the record contraction in GDP in the second quarter. Economic activity hit bottom in April, however, and began rebounding over the past four months.

The overall FTSE Nareit All Equity REITs index was down 1.8% in terms of total return.

REIT share prices rose last week, with a total return of 1.2% on the FTSE Nareit All Equity REITs index.

The 30+ day delinquency rate on securitized commercial mortgages fell 72 basis points in July, to 9.60%.

A few areas—travel, hotels, restaurants and bars, other recreation—were responsible for over a third of the overall economic decline in Q2, yet these categories represent just 6% of the overall U.S. economy.

REIT share prices rose last week with the FTSE Nareit All Equity REITs index posting a positive return of 4.2%.

Demand weakened even as construction projects initiated well ahead of the pandemic continued to be delivered to the market, leading to a rise in vacancy rates and softening of market rents.