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.
Public and Private Real Estate: Divergence, Resurgence, and Convergence
Although many institutional investors focus their property investment strategies on private equity real estate, current and expected market conditions tend to favor public real estate.
REITs Complement Private Real Estate
According to the 2023 Hodes Weill/Cornell Real Estate Allocations Monitor, institutions consider REITs to be a complement to private real estate in terms of filling allocation needs and addressing liquidity objectives.
REITs and Broad Markets Rise as the 10-Year Treasury Yield Pulls Back
The FTSE Nareit All Equity REITs Index, broader markets, and treasuries responded positively as investors broadly believe the Federal Reserve’s cycle of monetary policy tightening to be over.
REITs Own 575,000 Properties in the U.S.
Nareit’s annual update of REIT property counts and estimated gross asset values by state and property sector is now available on the REITs Across America website.
Global Real Estate Pressured by Rising Bond Yields in September
The FTSE EPRA Nareit Developed Extended Index faced headwinds in September as investors grappled with rising bond yields in the United States and other developed markets.
REITs Raised $4.1 Billion Through Secondary Offerings in 2023: Q3
U.S. REITs raised $4.1 billion from secondary debt and equity offerings in the third quarter of 2023, though this preliminary total will be revised upward when ATM program usage data become available.
Using REITs to Tactically Capitalize on Public-Private Real Estate Pricing Dislocation
Throughout 2022 and 2023, the public and private real estate markets have been a tale of two cities.
REITs and Broad Markets Fall as Rates Rise in September
The FTSE Nareit All Equity REITs Index declined 7.0% in September as the 10-year Treasury yield continued to climb, ending the month at 4.6%, while the All Equity REITs dividend yield ended the month at 4.4%.
Actively Managed Real Estate Fund Tracker: 2023Q2
Infrastructure, data centers, and health care each have more than a 10% share of assets.
Proper Balance Sheets: REIT Sectors Focused on Low Leverage with Fixed Rate and Unsecured Debt
During this period of divergent public and private property valuations, the commercial real estate mortgage market has been marked by higher interest rates and stricter underwriting standards.
Office and Apartment Sectors Magnify Cap Rate Disparities
A recent Nareit market commentary highlighted that the “ostrich effect,” an investor behavior where risky situations are avoided by pretending that they do not exist, may aptly describe the attitudes of many private institutional real estate investment managers and appraisers when it comes to their valuation practices.
Norges Bank Investment Management: Public and Private Real Estate All the Same in the Long Run
Norges Bank Investment Management (NBIM) recently published a discussion note, “Drivers of Listed and Unlisted Real Estate Returns,” which analyzes the drivers of U.S. public and private real estate returns and evaluates real estate exposures in the context of a diversified investment portfolio.