Calvin Schnure

Now that we are on the other side of the Wall of Maturities, it’s worth a look back to see how the market fared, and what are the prospects for the CMBS market in the year ahead.

We decided to turn the tables and ask investors and other readers of the Nareit News Digest for their views on what will have the greatest impact on REIT share performance in 2018.

REIT share prices have often responded negatively to rising interest rates, at least since 2013. Is this warranted by the outlook for their future earnings?

The macroeconomy and real estate markets had a good performance in 2017. That may well continue into 2018, but there are several risks that might cause a change in the outlook.

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.

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.

Commercial property prices have risen steadily since the beginning of the recovery from the Great Financial Crisis. Continued price gains, however, at some point begin to raise warning flags.

The senior housing business is in the midst of a building boom the likes of which we have not seen for a couple of decades. 

Data centers house the servers and network equipment that make modern communications possible, including the Internet and data transmitted by cell phones. 

Vacancy rates are likely to remain low as adult members of shared households eventually strike out on their own. However, that the process may take longer than anticipated.