NAREIT Commercial Property Update 2015:Q4
Economic fundamentals for REITs and real estate continue to improve. GDP growth slowed in late 2015, but mainly reflecting a decline in energy exploration and in export markets; domestic sectors supporting real estate remain firm. The office sector benefitted from stronger employment growth, boosting occupancy and rents. Apartment markets eased slightly, perhaps reflecting seasonal patterns, but vacancy rates are near recent lows and rent growth is solid. Retail vacancy rates moved down and rents are rising, slowly.
REITs: Real Estate With a Return Premium
A NAREIT analysis of the performance of publicly traded equity REITs and private equity core, value-added and opportunistic funds over the last full real estate cycle shows REITs outperformed private equity real estate funds over the entire cycle, as well as over the bull market portion of the cycle when value-added and opportunistic funds’ higher leverage would have been expected to deliver superior returns.