News by Topic : Macroeconomic fundamentals

  • 10/16/2015

    Property Values Declined 1.9% in 3rd Quarter, Down 7.9% YTD

    The 3rd quarter ended with property values in the U.S. down 7.9% since the end of 2014, with declines of 8.2% during 2015Q2 and 1.9% during 2015Q3 following the gain of 2.2% posted in 2015Q1, according to the FTSE NAREIT PureProperty Index Series.  The PureProperty series, an investable product launched on June 1 by FTSE Russell, measures capital appreciation and total returns on unlevered property investments in U.S. apartment, health care, hotel, industrial, office, and retail properties owned by listed U.S. equity REITs.

  • 10/7/2015

    Headwinds or Cross Currents? Macro Fundamentals and REITs

    Nonfarm payroll employment rose only 142,000 in September, far below recent trends, and gains in prior months were revised down as well. There’s little good news in this report concerning the economic outlook, as there was no gain in average hourly earnings, and labor force participation slipped further, indicating that weak demand for labor is keeping some potential workers on the sidelines.

  • 9/19/2015

    The Outlook for REITs with Interest Rates on Hold

    The Federal Open Market Committee (FOMC) declined to raise short-term interest rates at its September policy meeting, citing concerns about the potential impact of weaker global growth and financial market turmoil on U.S. economic conditions. It is clear, however, that the days are numbered before the FOMC embarks on the path to higher interest rates; the latest decision merely delays the inevitable. What, then, is the likely impact on the REIT sector of eventual shift to higher interest rates?

  • 8/14/2015

    Commercial Real Estate Property Update 2015: Q2

    The apartment sector enjoys solid demand in the face of moderate increases in supply of new units. This has kept vacancy rates extremely low—4.2% for two quarters running, which indicates little (if any) excess supply. Rent growth perked up again in Q2, to a 4.7% annual rate. 

  • 8/13/2015

    Commercial Property Prices: Too High, Too Fast?

    Prices of commercial real estate are rising rapidly, spurred in part by an influx of foreign money. As a result, cap rates have declined to historically low levels. Have prices risen too rapidly? What are the risks of a sharp correction in the months and quarters ahead, especially as the Federal Reserve contemplates an increase in short-term interest rates?

  • 7/30/2015

    Rising Rental Demand Buoys Multifamily Fundamentals

    The demand for rental housing shows no signs of letting up. Data through mid-year show that the rental market continues to tighten despite increasing new supply, as the national rental vacancy rate fell to 6.8%, the first time it has been below 7% since 1985.

  • 7/16/2015

    Commercial Real Estate Mid-year Update

    Tracing the building momentum in the commercial real estate market.

  • 6/26/2015

    Brighter Days for Housing Markets? Good News for REITs and Commercial Real Estate

    If good things come in threes, then the housing market is right on track—and that’s good news for REITs and commercial real estate, too. Sales of new homes, sales of existing homes and house prices are all on an uptrend. New home sales increased 2.2% in May and are nearly 20% above a year earlier.

  • 6/22/2015

    REITs, Real Estate and Recession Risks: Where Are We in the Cycle?

    We often get questions about where we are in the cycle. REITs and real estate are tied closely to the macro economy’s turns through expansion and recession. While the crystal ball is never very clear about the medium-term outlook, we can make several statements about recession risks. 

  • 6/17/2015

    Multifamily Starts Slip in May, But Remain on Rising Trend

    New construction of multifamily housing units slowed a bit in May from April’s torrid pace, yet remained on a rising trend. Multifamily housing starts were at an annualized rate of 349,000 units, down 18.5% from April but still well above the 300,000 unit trend that had been in place for the decade or so prior to the Great Recession.