The FTSE NAREIT All Equity REIT average made healthy gains last week, and total annual returns currently outpace the NASDAQ and Russell 200 Index. But the freestanding, net lease retail REIT sector is the only sector with positive returns this year. Five other REIT sectors stand out for year-to-date total returns that are only slightly negative. Plus, interest rate survey data from Trepp.
As the broader stock market has tumbled further, the freestanding retail real estate investment trust (REIT) sector stayed in positive territory for the year. In contrast to the rest of the REIT industry, total REIT returns for this sector are up more than 10 percent so far in 2016. Also known as triple-net-lease REITs, this is one of the smaller REIT sectors by market cap. Plus, interest rate survey data from Trepp.
Last week, Yahoo became the most recent large tech company to announce layoffs and office closures as it explores alternatives for its web business. Moves like this highlight the growing issue of sublease space among tech and energy companies, whose expansion drove demand for office space in recent years. Are new availabilities relieving tight conditions or a sign of something more severe? Plus, interest rate survey data from Trepp.
Apartments had a very strong year in 2015, with rent growth averaging 4.8 percent and occupancy averaging 95.8 percent according to MPF Research, a division of Real Page. But apartment market activity slowed late in the year, and opinions are mixed about whether it was seasonal slowing or a sign that markets are cooling. Plus, interest rate survey data from Trepp.
Stock market volatility is raising questions about the strength of U.S. commercial real estate markets. Retail availability stood at 8 percent in the third quarter of 2015, according to CBRE—100 basis points above the low reached in 2006. Market fundamentals have been strong, but will negative headwinds change the outlook for the retail sector this year? Plus, interest rate survey data from Trepp.
Investors have flocked to the real estate investment trust sector in recent years for its attractive returns in the current low-interest-rate environment. Equity REIT yields measured 3.85 percent at the end of 2015 while mortgage REIT dividend yields stood even higher, at 12.15 percent, according to the National Association of Real Estate Investment Trusts. Plus, interest rate survey data from Trepp.
Underlying real estate property fundamentals are healthy and asset valuations are high. However, interest rates are moving higher and a market misalignment has been created where many real estate investment trusts are trading below net asset value. Tax, policy, and legislative changes also are helping set the stage for REIT activity this year. Plus, interest rate survey data from Trepp.
Real estate investment trusts (REITs) ended the year with a total return of 3.13 percent. Healthy demand for all types of space led to higher revenues and improved REIT profitability; rising property values created an attractive environment for sales. But high property valuations also made acquisitions difficult and left many REITs considering alternatives for expansion. Plus, interest rate survey data from Trepp.
Last week, the Federal Reserve raised its target funds interest rate by 25 basis points to 0.50 percent—the first increase since 2006. Residential mortgage REITs gained 3.37 percent Wednesday on the belief that higher interest rates will benefit the sector, and the manufactured-homes sector also posted strong gains.
A healthy outlook for the Hawaiian economy and real estate market has attracted investors to the state, including many real estate investment trusts (REITs). Few clouds are on the horizon, but the market should be closely watched because external shocks, ranging from weather events to terrorist attacks, can cause it to turn quickly. Plus, interest rate survey results from Trepp.
