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.

  • 5/22/2018

    Return Correlations between REITs and the Broad Stock Market by Property Type

    REIT returns generally have low correlations with returns from the broad stock market.  Some REIT property sectors—including Health Care, Self Storage, Residential, Infrastructure, and Data Centers—seem to be especially defensive with average correlations of 65 percent or less even during periods encompassing market crises.
  • 5/21/2018

    REIT Funds From Operations Totaled $15.3 Billion in 2018:Q1

    Total REIT FFO was 3.6 percent higher than in the fourth quarter of 2017 and 6.0 percent above over one year ago.
  • 5/14/2018

    Commercial Vacancy Rates Remain Low, but Rent Growth Slowed in 2018:Q1

    Vacancy rates remained low in the first quarter of 2018 for the major commercial property sectors. Vacancy rates were unchanged among national office, retail and industrial markets, and ticked down 10 basis points in apartment markets, according...
  • 5/14/2018

    REIT Total Returns by Property Type: The Value of Exposure to All Sectors of the Real Estate Market

    It should come as no surprise that the top-performing sector of the REIT market varies through time, suggesting that most investors will want to maintain exposure to every part of the real estate asset class.
  • 5/3/2018

    CRE Still Benefiting From Economic Fundamentals, Despite Interest Rate Worries

    The overall composite price index in March stood 7.9 percent above one year earlier. This increase represents an acceleration of price gains from those during most of 2017, to the most rapid pace since 2016.
  • 5/2/2018

    REIT Beta by Property Type: Most REIT Sectors Have Brought Down Portfolio Volatility Most of the Time

    REITs have provided that diversification benefit because their underlying returns are driven by the real estate market cycle, which is very different from the business cycle that drives the returns of most other companies in the stock market.
  • 4/30/2018

    The Big Volatility Disconnect: Non-REIT Stock Volatility Jumped in March and April, but REIT Volatility Did Not

    For well over a year now, disappointing REIT returns have been blamed on expectations for rising interest rates, and short-term increases in REIT volatility have been blamed on uncertainty regarding the timing and magnitude of interest-rate changes.
  • 4/26/2018

    REITs Look Undervalued, Regardless of the Interest Rate Environment

    Historically, when REIT dividend yields became high relative to the yields on other income-oriented investments, that has usually been a sign that REITs had become undervalued and were likely to perform strongly over the next several years.
  • 4/25/2018

    What’s the Yield Curve Telling Us About the Outlook for the Economy and REITs?

    Interest rates remain in the headlines, and given their importance in the U.S. economy, it’s smart to pay attention to what they may (or may not) be telling us.
  • 4/18/2018

    REITs Raised $38.3 Billion Common Equity, Tapped ATM Programs For A Record $7.5 Billion in 2017

    REITs raised $38.3 billion in common equity in 2017, the highest annual total since 2013.