Calvin Schnure

REIT share prices declined last week, with the FTSE Nareit All Equity REITs total return index down 2.3%. Most

The high level of jobless claims week after week raised fears that new rounds of layoffs may be spreading from the sectors initially hit by the crisis to the rest of the economy, and perhaps warning of greater damage from the shutdowns.

REITs rebounded last week with a 5.2% total return, according to the FTSE Nareit All Equity REITs index, ending a string of declines over the three prior weeks.

The most visible sign of this lockdown is the collapse of sales transactions, which fell sharply as social distancing rules went into effect.

The impact of the COVID-19 pandemic and economic shutdown has not been spread evenly across the economy or across real estate sectors.

All property sectors of the REIT universe declined last week as a surge in new cases of COVID-19 in many states raised concerns that the economic reopening may be delayed.

The overall REIT sector was slightly down, with the All Equity REITs total return index declining 0.6%.

The FTSE Nareit All Equity REITs index posted total returns of negative 4.5%. Broader markets were down as well, with the Russell 1000 reversing nearly all the gains of the prior week.

The good news about the outlook for the economy and commercial real estate as of early June is that we are likely at a turning point for labor markets, consumer spending, and business activity.

REITs extended their weekly winning streak to three weeks of gains, and are up five of the past six weeks.

The percentage of mortgages held in commercial mortgage-backed securities (CMBS) that were 30+ days delinquent jumped from 2.29% in April to 7.15% in May.