Capital Markets


Hotel REITs Trading at Prices below Net Asset Values

The overwhelming majority of hotel real estate investment trusts (REITs) are trading at prices that represent discounts to their net asset value, as has been the case for more than a year now. The thinking in some circles is that the hotel sector is approaching its cyclical peak. Plus, interest rate survey data from Trepp.

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Interest Rates, REITs, and Brexit

Even as the broader equity markets fell, real estate investment trusts posted positive returns as economic uncertainty once again took center stage. The Federal Reserve Board’s decision not to raise interest rates this month was good news for REITs in terms of keeping their cost of capital low, but also reflected some weak economic news that could mean economic growth is faltering. Plus, interest rate survey data from Trepp.

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REITs Are Selling or Building, but Not Buying

The current real estate cycle is maturing after more than seven years of expansion. Real estate investment trusts in all sectors are responding to market conditions by selling more properties than they are buying and by recycling capital to fund new development and redevelopment. Plus, interest rate survey data from Trepp.

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Performance and Broader Economy Boost REITs in May

Real estate fundamentals and real estate investment trust performance benefited from positive economic news during May. Retail sales experienced their biggest increase in a year with a 1.3 percent jump during April, according to the U.S. Department of Commerce, and the pace of both new-home sales and home resales accelerated during April. The positive news was tempered by a worse-than-expected April jobs report as the brisk hiring of the first quarter slowed.

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Recent Articles

  • Impact Investing Platforms Create New Equity Streams for Affordable Housing

    June 3, 2016

    A new generation of “social-impact investors” are eager to place their equity in housing as a platform to address a variety of issues they care about, including economic mobility and disparities in health outcomes and educational attainment. Panelists at the recent ULI Housing Opportunity 2016 conference in Boston discussed platforms aimed at expanding the pool of equity investors with the potential to shore up the supply of affordable and workforce housing.

  • Will Summer Travel Boost Lodging REITs?

    May 31, 2016

    Memorial Day unofficially kicks off the busy summer travel season, and this summer is shaping up to be the busiest travel season in years. Despite the bright outlook for summer travel, almost five months into the year, year-to-date lodging sector real estate investment trust (REIT) returns measured –2.93 percent. Plus, interest rate survey data from Trepp.

  • Could New Supply of Apartments Slow Rising Rents?

    May 23, 2016

    Landlords are confident that apartments are not overbuilt, and rents continue to increase in many markets, but real estate investment trust investors are less certain. This year, deliveries are reaching new peaks, and investor worries about a market softening are reflected in the sector’s –1.12 percent year-to-date total return. Plus, interest rate survey data from Trepp.

  • Health Care REITs Outperform Despite a Murky Horizon

    May 16, 2016

    Implementation of the Affordable Care Act has driven both health care–related job growth and demand for real estate in the United States. But health care REITs are not immune from external market challenges, and they have thrived in the current low interest rate environment. Plus, interest rate survey data from Trepp.

  • REITs Adapt to Changing Market in April

    May 9, 2016

    Real estate investment trusts pulled back in April amid mixed news on interest rates and first-quarter earnings. REIT merger and acquisition activity is on the upswing, and the first REIT initial public offering of the year also occurred, as MGM Growth Properties raised $1.05 billion. Plus, interest rate survey data from Trepp.

  • ULI Case Study: AF Bornot Dye Works—Philadelphia

    May 2, 2016

    AF Bornot Dye Works is a loft apartment and retail project in central Philadelphia that involved the adaptive use and restoration of three timber and concrete factory buildings. The capital stack assembled for this project was unusually complex, partly because of its unusual mix of uses, its location outside the Center City core, and the challenges posed by historic rehabilitation.

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