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.
Actively Managed Real Estate Fund Tracker: 2023Q2
Infrastructure, data centers, and health care each have more than a 10% share of assets.
Proper Balance Sheets: REIT Sectors Focused on Low Leverage with Fixed Rate and Unsecured Debt
During this period of divergent public and private property valuations, the commercial real estate mortgage market has been marked by higher interest rates and stricter underwriting standards.
Office and Apartment Sectors Magnify Cap Rate Disparities
A recent Nareit market commentary highlighted that the “ostrich effect,” an investor behavior where risky situations are avoided by pretending that they do not exist, may aptly describe the attitudes of many private institutional real estate investment managers and appraisers when it comes to their valuation practices.
Norges Bank Investment Management: Public and Private Real Estate All the Same in the Long Run
Norges Bank Investment Management (NBIM) recently published a discussion note, “Drivers of Listed and Unlisted Real Estate Returns,” which analyzes the drivers of U.S. public and private real estate returns and evaluates real estate exposures in the context of a diversified investment portfolio.
Climbing Treasury Yields Pressured REITs and Broad Markets in August
REITs and broad market equities faced challenges in August, as the sharply rising 10-year Treasury yield hit 4.34%, its highest level since 2007, and then declined to 4.09% in the final week of the month.
Real Estate Cap Rates, Appraisals, and the Ostrich Effect
A common myth tells us that ostriches bury their heads in the sand when faced with danger. While not true, the phrase “burying your head in the sand” has become a popular idiom to describe an individual who ignores the existence of a problem with the hope that it will just go away.
REITs Underweighted in ESG Funds
The Morningstar Sustainable Funds Landscape Report shows that the number of sustainable open-end and exchange-traded funds available to U.S. investors rose to nearly 600 in 2022.
Reading the Real Estate Market: Tracking Active Managers’ Allocations Over Time
Nareit is tracking quarterly investment holdings for the 28 largest actively managed real estate investment funds focusing on REIT investment.
REITs: A Port in the Capital Market Storm
The rapid rise in interest rates since the beginning of 2022 has exposed fault lines in banking, private equity, and commercial real estate business models that were predicated on low debt rates.
Office REITs Continued to Recover in July
Looking for Income? REITs Deliver
In making the case for an allocation to real estate in an investment portfolio, one of the oft-cited arguments is real estate’s ability to generate income.
Nareit’s Mid-Year Report Offers Insights into U.S. and Global Trends