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. 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.

  • 1/28/2015

    Challenges and Opportunities for Commercial Real Estate in 2015

    The outlook for commercial real estate markets and REITs has continued to evolve as the overall macroeconomic recovery matures. It is important to keep in mind just how much the momentum has changed. Two years ago, for example, the consensus outlook among the economists surveyed by the Wall Street Journal anticipated job growth averaging 160,000 per month. In January 2015, this panel expected job growth of 230,000 per month. It is certainly good news that after several years of disappointments, the economy finally appears to be hitting its stride.
  • 11/13/2014

    Commercial Property Update 2014:Q3

    Sustained above-trend job growth is having a broad impact on commercial property markets. Demand for rental housing has accelerated this year, allowing the apartment sector to absorb a significant increase in new supply with little impact on vacancy rates.
  • 8/25/2014

    Rising job openings show job market momentum still supporting the real estate recovery

    A healthy job market has been the key to economic recovery, and especially the recovery in commercial real estate markets.  The link between hiring and the demand for office space is particularly obvious, and the impact that rising employment and wages have on consumer spending, retail sales and demand for retail properties is also clear.  Recently we have seen that the strong job market has helped fortify the multifamily market in the face of increasing supply, as the Millenials that are finding new jobs are fueling rapid growth in demand for apartment rentals.
  • 8/7/2014

    Commercial Property Update 2014:Q2

    Solid economic growth and sustained job market gains are translating into recovery in the commercial property markets. The apartment sector continues to thrive despite increasing deliveries of new units, as job growth has spurred the formation of new rental households, boosting demand for apartments.
  • 8/7/2014

    Fundamental forces continue to support demand in the face of rising supply

    Fundamentals for the multifamily housing sector remain firm, even as new construction comes onto the market. Vacancy rates remain at their lows for the cycle, and rent growth has firmed. Going forward, we anticipate that the pent-up demand for apartments is likely to continue to bolster household formation, which is the ultimate source of demand for multifamily housing.
  • 7/3/2014

    Where's the "New Normal" Now?

    It has been popular to say that the economy suffered permanent (or at least long-lasting) damage during the financial crisis, and the economy’s new speed limit once recovery was fully underway would be 2 percent GDP growth and nonfarm payrolls rising 160,000 or so per month.
  • 5/12/2014

    Single Family Rentals: Demographic, Structural and Financial Forces Driving the New Business Model

    The Single Family Rental (SFR) housing market has grown rapidly since the start of the housing crisis. Home prices have risen sharply, however, especially in some of the markets where institutional investors including several REITs have set up SFR business.  This raises questions about the prospects for the SFR sector.
  • 5/6/2014

    Commercial Property Update 2014:Q1

    Familiar themes from 2013 in commercial property markets carried over in the first quarter of 2014:  Apartment markets held firm despite the steady ramp-up of new supply, the office sector continued to recover—gradually—but the retail market lagged behind.
  • 3/4/2014

    Bank lending to CRE picks up as commercial property sales, prices recover.

    An upswing in bank lending in the fourth quarter signals higher levels of activity across nonresidential real estate, multifamily residential and real estate construction and development. Bank lending for real estate investment is closely related to trends in transactions and prices.  Recently-released data from the FDIC on bank lending reveal increased lending for investment in nonresidential real estate, multifamily residences, and construction and development.
  • 2/7/2014

    Commercial Property Update 2013:Q4

    Market conditions improved across all property types in the fourth quarter.  Strong demand for apartments pushed absorption higher, although a pick-up in new supply tempered the decline in vacancy rates.  Office rents increased, despite the slow decline in office vacancies.