Calvin Schnure

The FTSE Nareit All Equity REITs index was down 0.3% in terms of total return.

The sharp decline in REIT earnings reflects the record contraction in GDP in the second quarter. Economic activity hit bottom in April, however, and began rebounding over the past four months.

The overall FTSE Nareit All Equity REITs index was down 1.8% in terms of total return.

REIT share prices rose last week, with a total return of 1.2% on the FTSE Nareit All Equity REITs index.

The 30+ day delinquency rate on securitized commercial mortgages fell 72 basis points in July, to 9.60%.

A few areas—travel, hotels, restaurants and bars, other recreation—were responsible for over a third of the overall economic decline in Q2, yet these categories represent just 6% of the overall U.S. economy.

REIT share prices rose last week with the FTSE Nareit All Equity REITs index posting a positive return of 4.2%.

Demand weakened even as construction projects initiated well ahead of the pandemic continued to be delivered to the market, leading to a rise in vacancy rates and softening of market rents.

Markets ended with little change last week as the FTSE Nareit All Equity REITs index had a total return of -0.6%, reversing the small gains from the prior week. Broad equity markets were down as well, with a -0.3% total return on the Russell 1000.

Due to the highly unusual nature of this recession, uncertainty about the path of the pandemic, and the potential for a robust recovery, in upcoming earnings announcements the management’s view of market conditions and discussion of the outlook are likely to attract at least as much attention as FFO.

Most property sectors recorded small gains to increases in the high single-digits, led by timber REITs (8.3% total return) and specialty REITs (4.4% total return).