Nareit Market Commentary

The Market Commentary blog on presents analysis of the macro- and micro-economic fundamentals impacting the REIT and commercial real estate industry. Economists Brad Case, Calvin Schnure and the rest of the Nareit economics team offer 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.

  • 9/6/2018

    Looking Between the Sectors: REIT Price Multiple Performance

    A comparison of recent trends of the P/E ratio for the S&P 500 to the price-to-FFO ratio for REITs shows a contrasting risk/reward tradeoff between the broad equity market and REITs.
  • 9/5/2018

    IRR is an Easily Manipulated “Performance” Metric

    Most private equity investment managers measure their performance using IRR, and illustrates how SLOCs and forward commitments can be used to manipulate IRR computations to make performance appear better than it really is. 
  • 8/28/2018

    Expansion and Growth of REIT Earnings

    Net operating income (NOI) of listed REITs rose nearly 50 percent over the past four years. The steady increases in same-store NOI at a pace above the inflation rate should continue to drive earnings, and valuations, upward in the future.
  • 8/24/2018

    FFO of listed REITs rose 5.5 percent, to $16.4 billion, in Q2

    There are a multitude of signs that REIT performance will likely remain strong in the months ahead.
  • 8/22/2018

    Low Cap Rates Are Flashing a Signal, but is it Yellow, Red… or Green?

    Are low cap rates flashing a signal that speculative pricing is setting the market up for a correction? 
  • 8/21/2018

    The REIT-Stock Correlation Has NOT “Spiked to One” During Market Crises

    It is often said that “correlations spike to one during a crisis,” but REIT-stock correlations have actually been lower during the worst stock market downturns in history, reinforcing the case for REITs as a portfolio diversifier even during crises.
  • 8/10/2018

    A Strong Economy Boosts Commercial Real Estate in Q2

    The economy is enjoying above-trend growth, with some boost from last year’s tax cuts, which supports demand for nearly all types of commercial real estate.
  • 7/23/2018

    What Are the Structural Factors That Boost Long-Term REIT Performance?

    REITs have provided investors solid returns over the years, despite short-term zigs and zags along the way, in part because of structural features of the REIT model.
  • 7/20/2018

    Inflation Protection from REITs: Constructing a Diversified Inflation-Protecting Portfolio

    How to construct an inflation-protecting portfolio without exposing yourself to the risk of guessing wrong about an increase the inflation rate.
  • 7/18/2018

    Inflation Protection from REITs: Don’t Jump Out of the Frying Pan Into the Fire

    Investors who depend on commodity investments to protect against inflation risk negative returns if inflation doesn’t meet their expectations, whereas REITs have historically provided strong returns in both high-inflation and low-inflation environments.