Market Analysis & Research

The overall composite price index in March stood 7.9 percent above one year earlier. This increase represents an acceleration of price gains from those during most of 2017, to the most rapid pace since 2016.

REITs have provided that diversification benefit because their underlying returns are driven by the real estate market cycle, which is very different from the business cycle that drives the returns of most other companies in the stock market.

For well over a year now, disappointing REIT returns have been blamed on expectations for rising interest rates, and short-term increases in REIT volatility have been blamed on uncertainty regarding the timing and magnitude of interest-rate changes.

Historically, when REIT dividend yields became high relative to the yields on other income-oriented investments, that has usually been a sign that REITs had become undervalued and were likely to perform strongly over the next several years.

Interest rates remain in the headlines, and given their importance in the U.S. economy, it’s smart to pay attention to what they may (or may not) be telling us.

REITs raised $38.3 billion in common equity in 2017, the highest annual total since 2013.

The question on everyone’s mind is, will this drive up cap rates, possibly causing property prices to fall?

Nareit’s John Worth, will join two top REIT portfolio managers in an upcoming Bloomberg Intelligence webinar to discuss the impact of rising interest rates and inflation on REIT share prices.

The webinar, REITs, Rates & Inflation: What’s Behind the Market’s Response, will take place April 10 at 11:00 a.m. EDT.