The Market Commentary blog on reit.com presents analysis of the macro- and micro-economic fundamentals impacting the REIT and commercial real estate industry. The Nareit economics team offers their commentary on the state of the market, the outlook for commercial real estate and breaking macroeconomic news. The opinions set forth here are solely those of its author(s), and do not necessarily reflect the views of the Nareit or its membership.
REITs Offer Diversification and Timeliness
Recent research by Nareit shows that REIT returns have tended to bounce back—and even surge—after significant public and private real estate market divergences.
REITs Complete Institutional Real Estate Portfolios: A Case Study
One of the dominant themes among institutional real estate investors of the past few years has been the shift toward “alternative” property types.
Core Property Sector Fundamentals Generally Solid in 4Q22, Some Evidence of Softening
The industrial, retail, and apartment property types have maintained occupancy and four-quarter rent growth rates akin to or higher than their respective pre-pandemic levels.
Office Occupancy Continues to Rise Over 50%
Many employers are eager for pre-pandemic, in-office operations to resume, but many workers remain reluctant to return.
REITs Remained Positive for the Year, but Declined with Broader Markets in February
On a year-to-date basis, the FTSE Nareit All Equity REITs Index is up 3.5% and the FTSE Nareit Equity REITs Index is up 5.4%.
REIT Returns Tend to Rise, and Even Surge, After Real Estate Market Divergences
In the third quarter of 2022, the FTSE Nareit All Equity Index and NCREIF Fund Index–Open End Diversified Core Equity posted rolling four-quarter total returns of -16.3% and 22.1%, respectively.
REIT Investment Increases Staffing Time at Skilled Nursing Facilities
New research shows that REITs target high performing operators for investment and that skilled nursing operators increase staffing after becoming REIT tenants.
REITs Post Strongest Monthly Performance Since 2019
All property sectors were positive in January, led by lodging/resorts at 17.1%, industrial at 13.7%, and data centers at 13.2%.
Public and Private Real Estate Divergence Presents Opportunity for Investors
The U.S. commercial real estate market is amid an uncoupling. Property operational performance has generally been strong for both public and private real estate, but valuation metrics and total returns have diverged.
REIT Capital Market Update: December 2022
U.S. REITs raised $2.5 billion from secondary debt and equity offerings in the fourth quarter of 2022, down from $8.6 billion raised in Q3.
REITs Have Lower Share of Floating Rate Debt Compared to Other Commercial Property Owners
REITs have low exposure to floating rate debt, with over 87% of the debt held by the industry at fixed rates.
REITs Underperformed Broader Markets in 2022
REITs underperformed broader markets in 2022, as the FTSE Nareit All Equity REITs Index posted a total return of -24.9% and the FTSE Nareit Equity REITs Index returned -24.4%.