Market Commentary

Demand continues to exceed supply in real estate markets, leading to lower vacancies, rising rents and accelerating NOI. There are few signs of any meaningful slowdown ahead. 

A new tool may help you better understand real estate markets, focus on market segments or time periods, or even put together better presentations and exhibits.

Investment real estate values increased by +4.4% during June 2016 according to the FTSE NAREIT PureProperty® Index Series, which provides the earliest measurement of changes in the market values of properties held for investment purposes.  The South region saw the strongest appreciation at +5.1% but properties appreciated strongly in other regions as well with implied values up +4.8% in the Midwest, +4.0% in the East, and +3.6% in the West.

Over the two market days following the Brexit vote U.S. stock market volatility more than doubled, from 9.9% (below its inter-quartile range) to 22.0% (above its IQR)—but U.S. REIT market volatility nudged up by barely one-seventh, from 9.6% to 10.9%.

Equity REITs significantly expanded their holdings of income producing real estate in recent years, buying a total of $260 billion of commercial property between 2011 and 2015. 

A record number of investors, analysts and media attended REITWeek 2016 in New York to meet with management teams and check the pulse of the industry. Here are several key takeaways from this year’s conference.

Investment real estate values increased by +0.57 percent during May 2016 according to the FTSE NAREIT PureProperty® Index Series, which provides the earliest measurement of changes in the market values of properties held for investment purposes.  The South region saw the strongest appreciation at +2.02 percent.

The recovery in commercial real estate markets for the past several years has been uneven and often disappointing, much like the economy as a whole. More recent news, however, shows a turn for the better—and also signs that conditions may continue to improve.

Financial markets have been troubled by a decline in corporate profits. Earnings per share of the S&P 500 fell 7.6 percent in the first quarter of 2016 compared to last year, prompting a drop in equity prices and concerns about the outlook. But trends are going the other direction in real estate.

Many analysts have noted that increasing construction and high prices on commercial properties often presage a downturn in the sector, and have asked whether this cycle may be approaching the 9^th inning. NAREIT research economists have examined data from several sources to shed further light on the risks that the sector may be approaching a correction.

Investment real estate values declined by -0.32 percent during April 2016 according to the FTSE NAREIT PureProperty® Index Series, which provides the earliest measurement of changes in the market values of properties held for investment purposes.