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.
REITs at Highest Level Since March
The FTSE Nareit All Equity REITs index posted a total return of 6.9% last week, after a 4.3% gain the week before.
REITs Rally on Vaccine News
REITs outperformed the broader markets by a wide margin, especially those property sectors that had been most impacted by the shutdowns and social distancing measures.
Pandemic Has Large but Uneven Impact On CRE Markets In Q3
The pandemic had a significant impact on demand for commercial real estate in the third quarter, resulting in rising vacancy rates and slowing or falling rents and property prices. The impact was uneven across property types, however, with greater effects on office and retail property markets, but smaller or little impact on multifamily and industrial properties.
REIT Average & Historical Returns Vs. U.S. Stocks
While REITs have underperformed the broader stock market so far in 2020, it is long-term returns that matter. REITs have been a favorable choice when looking at long-term returns.
REITs, Broader Indices in Decline Last Week
REITs posted declines comparable to those on broad market indices.
Lodging and Resorts Begin to Reopen
The travel industry has been severely impacted by the pandemic, including the lodging/resort REIT sector, but measures to reduce risks of infection have allowed hotels to continue reopening, and occupancy has begun to rise in recent months.
Nareit Research Estimates 145 Million Americans Invested in REITs
Roughly 44% of American households are invested in REIT stocks.
REITs Little Changed Last Week
Across the various REIT sectors, there were seven property sectors with gains for the week, led by lodging/resorts with a total return of 7.6%.
Post-pandemic Demand for Apartments and Single Family Rentals Looks Robust
Demand for apartments looks to be robust post-pandemic, however, as there is one feature of housing that makes it different from retail, office, or hotels: one cannot live and sleep online.
REITs Declined Last Week
Last week’s decline breaks a string of gains the to prior weeks, but REITs are still up 2.1% month-to-date.
Consumer Spending Is on Track Heading Into Holiday Season
Retail Property Markets and REITs are Recovering
E-commerce surged in the spring, but stores are reopening and curbside pickup is a popular hybrid of online shopping and bricks-and-mortar delivery. Many shoppers enjoy the retail experience and still prefer to check the size, fit, and appearance at a bricks & mortar store.