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.
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Renter Nation? Rising Home Ownership Gives Some Competition to Multifamily REITs
The apartment market has been riding a wave of robust demand and rapidly rising rents for the past several years, pushing multifamily into the leading ranks of commercial real estate. Recently, however, there have been some signs of softening.
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Understanding the Term Structure of Correlations
One of the most important investment metrics is the term structure of correlations between any two assets. Correlation measures the degree to which the returns for a pair of assets move together.
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The Surprising Comparison of Diversification Benefits from U.S. REITs and International Assets
The bedrock of any investor’s portfolio—no matter how small, no matter how large—is an allocation to the broad U.S. stock market. To go just the tiniest step further, most investors start with a mix of U.S. stocks and U.S. bonds. The question is what to add to that basic portfolio.
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Using REIT Yield Spreads to Make Tactical Investment Decisions
As of the end of September 2016 the average dividend yield for stock exchange-traded Equity REITs was 3.70%. That’s extremely low by historical standards: in fact, the average Equity REIT yield has been greater than 3.70% nearly 90% of the time stretching all the way back to the beginning of 1972.
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Soft Jobs Numbers Pose Downside Risks to Real Estate, REITs
What happens if “two steps forward, one step back” turns into “two steps forward, two steps back”?
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Not Your Grandad’s REIT: Pictures of an Evolving REIT Industry
The REIT industry has evolved as it has expanded, and looks quite different today than it did a generation ago.
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Growth of REIT NOI: Signs of a Maturing Sector
Total NOI of stock-exchange listed Equity REITs has nearly tripled over the past ten years, to more than $20 billion each quarter since mid-2015.
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REITs Post Robust Earnings and Dividend Payments In Q2
Equity REITs posted robust earnings in the second quarter, according to the NAREIT T-Tracker®, with total FFO of all listed equity REITs increasing 7.1 percent, representing a 10.3 percent gain from one year ago.
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Resurgent Demand for Rentals Buoys Multifamily REITs
The biggest question for the apartment sector lately has been whether the bulging pipeline of new supply would swamp the pent-up demand that accumulated during the Great Recession. Indeed, rental demand flagged during the winter as construction reached new highs, feeding worries about the outlook.
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Property Values Increased 4.1% in July; Strongest Appreciation in West Region Office Segment
Investment real estate values increased by +4.1% during July 2016 according to the FTSE NAREIT PureProperty® Index Series, which provides the earliest measurement of changes in the market values of properties held for investment purposes.
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Regional Unemployment Update: Mostly Good News, but Weaker in Oil States
The most recent data on state unemployment rates from the Bureau of Labor Statistics show that, compared with April, unemployment decreased in 22 states, increased in 11 states and was unchanged in 18 states.
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Post-Brexit: UK and Other European Returns Look Ugly while US Listed Equity REITs Come Out Looking Great
The continued fallout from the UK’s vote to exit the European Union has punished investors with exposure not only in that country but in the rest of Europe too. No assets have been hit harder than British real estate, but investors in the British stock market, European stocks, and European real estate have suffered as well.