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 Returns Treading Water in Recent Weeks
The FTSE Nareit All Equity REITs index was down 0.3% in terms of total return.
REIT Industry August 2020 Rent Survey Results
Given that rent collections in the industrial, office, and healthcare sectors have stabilized at high levels, the August survey focuses on three property subsectors: apartments, free standing retail, and shopping center retail.
REIT Earnings Fell in Q2, But Strong Balance Sheets Show Resilience
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.
REIT Stock Returns Mixed Last Week
The overall FTSE Nareit All Equity REITs index was down 1.8% in terms of total return.
REITs Rose Again Last Week
REIT share prices rose last week, with a total return of 1.2% on the FTSE Nareit All Equity REITs index.
CBMS Delinquency Rate Drops in July
The 30+ day delinquency rate on securitized commercial mortgages fell 72 basis points in July, to 9.60%.
The Plunge in GDP was Deep, but not so Broad
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.
REITs Rose Last Week to Finish July in Positive Territory
REIT share prices rose last week with the FTSE Nareit All Equity REITs index posting a positive return of 4.2%.
Commercial Real Estate Markets Weaken in Second Quarter
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.
Little Change in REITs, Broader Equity Market Last Week
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.
REIT Earnings, GDP Growth and the Pandemic
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.
REIT Market Quiet Ahead of Earnings Season
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).