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.
Returns on real estate investment trusts (REITs) turned slightly negative in November following a strong performance in October. The FTSE NAREIT All Equity REIT average declined by 0.17 percent, and total year-to-date REIT returns at the end of November measured 1.50 percent. Plus, interest rate survey results from Trepp.
At the recent REIT World Conference in Las Vegas, industry experts said they are looking forward to 2016, when REITs will be separated from financial services and elevated into a new Global Industry Classification Standard (GICS) sector. Self-storage and apartments are attractive due to favorable demographic trends. Plus, interest rate survey results from Trepp.
Health care has been one of the worst-performing sectors for real estate investment trusts this year, with a total year-to-date return of –17.60 percent. This performance has been surprising, since the sector has been a model for growth in prior years. So what has pulled the sector down during 2015? Plus, interest rate survey results from Trepp.
U.S. markets rebounded in October, posting their best monthly performance in four years. Real estate investment trusts also posted strong returns that offset losses from earlier in the year, with the FTSE NAREIT All Equity REIT average gaining 6.47 percent. Plus, interest rate survey results from Trepp.
It has been reported by the Wall Street Journaland others that Hyatt is in talks to buy hotel operator Starwood Hotels and Resorts Worldwide. While neither company is a real estate investment trust, the potential transaction is emblematic of what is happening in the sector, where hotel REITs that are trading below the value of their underlying assets are creating an opportunity for mergers, acquisitions, and buybacks. Plus, interest rate survey results from Trepp.
Despite healthy real estate market conditions, investors are pricing an anticipated market slowdown into REIT share values. This situation generally occurs late in the real estate cycle and is spurring REIT privatizations and share buybacks. Plus, interest rate survey results from Trepp.
Most industries are embracing technology, which is getting better, faster, and more affordable and is profoundly affecting all types of real estate. In the real estate industry itself, one way that technology is being used is to more fully utilize properties, which in turn can enhance property values. Plus, interest rate survey results from Trepp.
With the United Nations General Assembly, Pope Francis, and President Obama converging on New York City, booking a hotel room there has become next to impossible. Room prices have spiked—at least temporarily—throughout much of the city. Yet, it is at odds with a real estate investment trust (REIT) sector where total returns are down 16.41 percent year-to-date in 2015. Plus, interest rate survey results from Trepp.
