Nareit Research

  • Top Issues to Watch for REITs in 2018
    The macroeconomy and real estate markets had a good performance in 2017. Real GDP rebounded to annualized growth rates above 3.0 percent in the second and third quarters. Commercial properties in most markets enjoyed sustained growth of demand, high occupancy rates, rising rents and rising prices. These advantageous conditions may well continue into 2018, but there are several risks that might cause a change in the outlook.
     
  • Economic Fundamentals for Office Properties and Shifts in REIT Portfolios from 2007-2017
    A Nareit research paper by Alexandra Thompson examines office property markets. The analysis finds that office REITs have increased their holdings within secondary cities since 2012, in order to benefit from robust population and employment growth, and increase returns for investors.
     
  • 2017:Q3 Commercial Property Update
    Commercial property markets were mixed in the third quarter. The industrial sector continues to benefit from demand for logistics facilities to ship goods purchased online, and has low vacancy rates and rent growth of 6 percent. Net absorption in apartment markets exceeded supply by a wide margin, causing vacancy rates to decline. Demand softened, however, in office and retail property markets.
     
  • What Can Past Real Estate Construction Cycles Tell Us About the Outlook For REITs Today?
    Commercial real estate has gone through many boom/bust cycles in the past. These cycles have inevitably affected the performance of REITs through their impact on rents, vacancy rates and property valuations. There are certain features that are common to nearly all these cycles, including overbuilding and a relaxation of risk standards by builders, lenders and investors. There are also differences across these cycles, however, much as Tolstoy wrote in Anna Karenina, “each unhappy family is unhappy in its own way.”
     
  • In the Middle of a Long Cycle for REITs and Real Estate
    Many analysts and policymakers have pointed to the leveling off in commercial real estate prices and increasing construction to contend that the commercial real estate bull market, which began in 2009, is growing old and nearing its peak. Nareit economist Calvin Schnure disagrees, noting that "economic expansions don't die of old age. They end if they overheat, are overbuilt or overleveraged.” Schnure has done an analysis showing none of these three terminal conditions exists today.
     
  • 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.