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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REIT Shares Advanced Last Week
The increases came even as broader markets edged slightly lower, as seen in the negative 0.3% return on the Russell 1000.
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REIT Earnings Recovery Continued in First Quarter: Nareit T-Tracker
The recovery in REIT earnings from declines early in the pandemic continued in the first quarter of 2021, according to data recently released in the Nareit T-Tracker®.
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Use of REITs in Target-date Funds Growing
The growing use of target-date funds (TDFs) remains the dominant investment-related trend in the defined contribution and individual retirement account markets, and REITs continued to be a critical component of TDFs in 2020.
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REIT Shares Declined Again Last Week
Residential REITs edged up 0.1%, but all other property sectors were in the red.
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How REITs Provide Protection Against Inflation
Real estate rents and values tend to increase when prices do, due in part to the fact that many leases are tied to inflation. This supports REIT dividend growth and provides a reliable stream of income even during inflationary periods.
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Does the Interest Rate Environment Remain Favorable for Real Estate?
The two biggest factors for the outlook for long-term interest rates (which have the most direct impact on commercial real estate markets) are economic growth and the likelihood that such growth will lift inflation higher.
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REIT Capital Market Activity in 2021
April and early May capital markets activity was highlighted by the announcement of three large REIT mergers. So far in 2021, U.S. REITs have raised over $26 billion in IPOs and secondary debt and equity offerings.
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REITs Retreat After Six Week String of Gains
REIT share prices dipped last week following a six week string of increases, as the FTSE Nareit All Equity REITs Index had a total return of -0.7%.
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Multifamily Markets Rebounded in First Quarter While Office Continued Slide
Multifamily markets rebounded in the first quarter with the second-highest quarterly demand growth on record, according to data recently released by CoStar.
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REITs Extend Winning Streak to Six Weeks
The FTSE Nareit All Equity REITs Index posted a total return of 1.3%. Broader markets, in contrast, were flat-to-down.
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Announcing the Launch of the FTSE EPRA/Nareit Global Real Estate Extended Index Series
The FTSE EPRA Nareit Global Real Estate Extended Index Series broadens property sector coverage to include additional securities beyond those currently eligible for the FTSE EPRA Nareit Global Real Estate Index Series including Cell Towers and Timber.
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Commercial Property Prices Little Changed in First Quarter
The flattening out of overall index, however, masks divergent trends among different sectors of the overall commercial real estate market.