The Market Commentary blog on reit.com presents analysis of the macro- and micro-economic fundamentals impacting the REIT and commercial real estate industry. The Nareit economics team offers their commentary on the state of the market, the outlook for commercial real estate and breaking macroeconomic news. The opinions set forth here are solely those of its author(s), and do not necessarily reflect the views of the Nareit or its membership.
REIT Share Prices Little Changed in Holiday-shortened Week
Most REIT property sectors were up slightly for the week.
REIT Stocks Gave Back Some Gains Last Week
The FTSE Nareit All Equity REITs index posted a total return of -1.1% for the week ended Nov. 20, following weekly increases of 4.3% and 6.9% earlier in the month.
REIT Earnings Stabilized in Third Quarter, According to Nareit T-Tracker
Diversified REITs saw FFO swing from negative $102 million in the second quarter to positive $962 million in Q3.
REITs at Highest Level Since March
The FTSE Nareit All Equity REITs index posted a total return of 6.9% last week, after a 4.3% gain the week before.
REITs Rally on Vaccine News
REITs outperformed the broader markets by a wide margin, especially those property sectors that had been most impacted by the shutdowns and social distancing measures.
Pandemic Has Large but Uneven Impact On CRE Markets In Q3
The pandemic had a significant impact on demand for commercial real estate in the third quarter, resulting in rising vacancy rates and slowing or falling rents and property prices. The impact was uneven across property types, however, with greater effects on office and retail property markets, but smaller or little impact on multifamily and industrial properties.
REIT Average & Historical Returns Vs. U.S. Stocks
While REITs have underperformed the broader stock market so far in 2020, it is long-term returns that matter. REITs have been a favorable choice when looking at long-term returns.
REITs, Broader Indices in Decline Last Week
REITs posted declines comparable to those on broad market indices.
Lodging and Resorts Begin to Reopen
The travel industry has been severely impacted by the pandemic, including the lodging/resort REIT sector, but measures to reduce risks of infection have allowed hotels to continue reopening, and occupancy has begun to rise in recent months.
Nareit Research Estimates 145 Million Americans Invested in REITs
Roughly 44% of American households are invested in REIT stocks.
REITs Little Changed Last Week
Across the various REIT sectors, there were seven property sectors with gains for the week, led by lodging/resorts with a total return of 7.6%.
Post-pandemic Demand for Apartments and Single Family Rentals Looks Robust
Demand for apartments looks to be robust post-pandemic, however, as there is one feature of housing that makes it different from retail, office, or hotels: one cannot live and sleep online.