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.
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.
REITs Declined Last Week
Last week’s decline breaks a string of gains the to prior weeks, but REITs are still up 2.1% month-to-date.
Consumer Spending Is on Track Heading Into Holiday Season
Retail Property Markets and REITs are Recovering
E-commerce surged in the spring, but stores are reopening and curbside pickup is a popular hybrid of online shopping and bricks-and-mortar delivery. Many shoppers enjoy the retail experience and still prefer to check the size, fit, and appearance at a bricks & mortar store.
Tracking Credit Rating Changes During the Pandemic
REITs outperformed most other GICs sectors with only 5.8% of the REIT market cap downgraded. REITs were the third best performing GICS sector by this measure.
REITs Gained Ground Last Week
This was the second week of rising share prices, after four straight weeks edging lower through September.
How Will Work-from-home Affect Office Markets Over the Medium- to Long-term?
The next few years will almost certainly see a move towards less density, and it is unclear how much overall demand for office space will decline due to WFH if there is an offsetting increase in the space per worker.
REITs Rally Outpaced Broader Markets Last Week
REITs rallied last week, with the FTSE-Nareit All Equity REITs index posting a total return of 5.5%, trimming the year-to-date decline in total returns to the single digits.
REIT Share Prices Fall Last Week
Last week concerns about economic growth and continued consumer resiliency to COVID-19 led to REIT stocks underperforming the broader equity indexes.