Industry Performance

For REIT investors 2017 turned out to be a very normal year—but that was a huge disappointment given the “irrational exuberance” that investors in some other parts of the stock market enjoyed. So how can we develop empirically-based REIT return expectations for 2018?

Concern is growing among some investors that tight labor markets may trigger an increase in price inflation. 

Cap rates have been holding their ground, even as interest rates move higher. The resilience of pricing in the real estate sector should not be surprising, however, given the strength in the fundamentals that support demand for commercial space.

One of the enduring mysteries of reporting on investments is how many people seem to focus on price appreciation OR income, and how few people focus instead on total return

REITs have steadily fortified their balance sheets, leaving the industry in as solid a financial position it has ever seen, based on more than two decades of data available.

The fundamentals for the REIT industry remain firm, which gives us some confidence that the recent decline in FFO is a short-term dip amidst a longer-term trend of mostly solid growth.

The apartment market led the way among commercial property markets in the third quarter, as robust demand pushed down the national vacancy rate and supported rent growth.

Pricing in the private real estate market has become more inflated, relative to REIT valuations, than at any time since 2007.