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The continued fallout from the UK’s vote to exit the European Union has punished investors with exposure not only in that country but in the rest of Europe too.  No assets have been hit harder than British real estate, but investors in the British stock market, European stocks, and European real estate have suffered as well. 

The most recent data on state unemployment rates from the Bureau of Labor Statistics show that, compared with April, unemployment decreased in 22 states, increased in 11 states and was unchanged in 18 states.

Investment real estate values increased by +4.1% during July 2016 according to the FTSE NAREIT PureProperty® Index Series, which provides the earliest measurement of changes in the market values of properties held for investment purposes.

The biggest question for the apartment sector lately has been whether the bulging pipeline of new supply would swamp the pent-up demand that accumulated during the Great Recession. Indeed, rental demand flagged during the winter as construction reached new highs, feeding worries about the outlook.

Equity REITs posted robust earnings in the second quarter, according to the NAREIT T-Tracker®, with total FFO of all listed equity REITs increasing 7.1 percent, representing a 10.3 percent gain from one year ago.

Total NOI of stock-exchange listed Equity REITs has nearly tripled over the past ten years, to more than $20 billion each quarter since mid-2015. 

The REIT industry has evolved as it has expanded, and looks quite different today than it did a generation ago.

What happens if “two steps forward, one step back” turns into “two steps forward, two steps back”?

As of the end of September 2016 the average dividend yield for stock exchange-traded Equity REITs was 3.70%.  That’s extremely low by historical standards: in fact, the average Equity REIT yield has been greater than 3.70% nearly 90% of the time stretching all the way back to the beginning of 1972. 

The bedrock of any investor’s portfolio—no matter how small, no matter how large—is an allocation to the broad U.S. stock market.  To go just the tiniest step further, most investors start with a mix of U.S. stocks and U.S. bonds.  The question is what to add to that basic portfolio.

One of the most important investment metrics is the term structure of correlations between any two assets.  Correlation measures the degree to which the returns for a pair of assets move together.

The apartment market has been riding a wave of robust demand and rapidly rising rents for the past several years, pushing multifamily into the leading ranks of commercial real estate. Recently, however, there have been some signs of softening.

How well are stock-exchange listed Equity REITs positioned for the interest rate environment ahead? 

A below-standard year for exchange-traded Equity REITs was still better than their counterparts in the illiquid real estate market, while a stunningly successful year for exchange-traded Mortgage REITs wasn’t all that out of the ordinary.

While the factors that drive Equity REIT returns are always somewhat different from those driving the returns of non-REIT stocks, the differences between the two equity asset classes—real estate and non-REIT stocks—have rarely been more different than they are as of the start of 2017.

The data show positive fundamentals entering the New Year. Supply remains in check, and demand growth is sustained, despite some bumps along the way.