Market Analysis & Research

The main question today is how long the phase of rapid growth of infection and the economic shutdowns necessary to contain it will last.

Conditions worsened significantly over the past week, both in terms of the expected economic impact of the disruptions to activity in response to the virus, and also in stock market returns.

REITs have also prepared themselves for economic uncertainty by building up their stock of cash and cash-like assets and maintaining substantial unused lines of credit.

Stock market declines due to the coronavirus crisis are in the headlines, but the main risks in the weeks ahead are elsewhere: in cash flows and liquidity shocks; resiliency of the financial system; and impact on economic fundamentals.

Different property sectors face different exposures to the coronavirus crisis, and REIT returns reflect those differences.

The advance of the coronavirus within the United States has prompted a corresponding spread of actions aimed at slowing the pandemic. These actions will cause a noticeable reduction in GDP, but how large might it be?

Funds from operations of $16.8 billion were 6.6% higher than a year ago. REITs prepared for uncertainty with strong earnings, solid balance sheets, and high occupancy rates.

Through the year-to-date period as of the end of February, REITs outperformed the Dow Jones U.S. Total Stock Market, the large cap S&P 500 and the small cap Russell 2000.

With everyday life upended by the coronavirus for the foreseeable future, the commercial real estate industry is shifting on a daily basis.