News by Topic : Macroeconomic fundamentals

  • 3/14/2016

    Commercial Mortgage Outlook: Flooding or Drought Ahead?

    Commercial mortgages are to the real estate market like rainfall is to a farmer. Too little rain and the crops dry up, but too much and floods can destroy the fields. In commercial real estate, too little credit and business is stifled, but too much debt can lead to speculation, overbuilding and defaults.

  • 2/29/2016

    Strong Demand for Commercial Real Estate Carries Into 2016

    Strong and growing demand for commercial real estate in 2015 carried into the new year. Commercial property transactions totaled $139 billion in January, up 15.3% over January 2015. Indeed, the CRE market appears to have gained momentum recently, as total sales over the past three months were 22.2% above the prior three months.

  • 2/12/2016

    Early Warning Signs of Recession? Recent Reports and the Outlook for REITs

    The outlook for REITs and commercial real estate depends critically on sustained improvements in economic fundamentals. What are the risks that a recession is on the horizon?

  • 2/5/2016

    Commercial Property Update 2015:Q4

    Economic fundamentals for REITs and real estate continue to improve. GDP growth slowed in late 2015, but mainly reflecting a decline in energy exploration and in export markets; domestic sectors supporting real estate remain firm. 

  • 2/1/2016

    Does the GDP Slowdown in Q4 Reveal Cracks in the Foundation for REITs?

    The economy slowed suddenly in 2015:Q4, with real GDP rising only 0.7%, the worst quarterly macroeconomic performance in nearly two years.

  • 1/7/2016

    REITs in a Rising Interest Rate Environment: Gauging the Impact on Operating Performance

    The outlook for equity REITs’ operating performance in 2016 depends in many ways on the impact of rising interest rates. How much will higher interest payments affect earnings? How solid are REIT balance sheet positions? Will higher short-term rates cause any difficulties covering interest payments?

  • 12/9/2015

    Economic Fundamentals and REITS: Reading the November Jobs Report

    Total nonfarm employment rose 211,000 in November, following an upward-revised increase of 298,000 in October, showing a strengthening economy heading towards the end of the year. Labor market slack is much diminished from two or three years ago, with the unemployment rate unchanged at 5%.

  • 12/2/2015

    Black Friday, Cyber Monday and Retail REITs

    The holiday shopping season is officially underway, with Black Friday for in-store sales and Cyber Monday for online purchases.  Sales during the holiday season are a critical factor in the outlook for the retail property sector. There are crosswinds in the outlook for retail properties, however, with continued but uneven macroeconomic growth, the near certainty of a rise in short-term interest rates and, especially, the growing share of e-commerce at the expense of bricks & mortar sales.

  • 11/11/2015

    Commercial Property Update 2015:Q3

    Apartment markets remain tight across the country. Vacancy rates ticked up 10 bps, from continued new construction as well as some slowing in absorption, but are still at rock-bottom levels. Rent growth accelerated to a 6% annual rate, as vacancy rates in the low 4’s indicate little or no slack in the market, giving landlords a strong position to increase rents.

  • 11/5/2015

    What Can Birth Rates Tell Us About the Outlook for Multifamily REITs?

    The multifamily REIT sector has been on a hot streak the past few years, as record-high occupancy rates and solid rent growth have lifted net operating income and property valuations to new highs. The strong tailwinds for this sector stem in large part from the significant pent-up demand, or “shadow households”, currently doubled-up with roommates or parents.

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