New research indicates that pension funds would have benefitted from increasing their allocations to stock exchange-listed Equity REITs.
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REITs Make Gains in October, Continue to Outperform Broader Market
REITs made gains in October and continued to outperform the broader stock market, supported by solid earnings reports and growing momentum in the economy.
The total return on the FTSE NAREIT All REITs Index was up 8.7 percent for the month after dropping 5.6 percent in September. The S&P 500 Index rose 2.4 percent in October. As of the end of October, the FTSE NAREIT All REITs Index had gained 23 percent, while the S&P 500 was up 11 percent.
U.S. Equity REITs Showing Discipline in Capital Markets, Observers Say
Capital raising by U.S. Equity REITs for most of 2014 has trailed the record levels seen a year earlier, a sign that management teams are taking a disciplined approach to raising new equity, according to observers.
SNL Financial reported this week that capital raised by U.S. Equity REITs dipped to $ 51 billion for the year through Oct. 17, trailing the record-setting $ 56 billion raised during the same period in 2013.
Fundamentally Speaking: Commercial Real Estate Fundamentals Sound Despite Volatility
In the latest edition of Fundamentally Speaking, Calvin Schnure, NAREIT’s vice president for research and industry information, observed that commercial real estate fundamentals remain sound despite stock market volatility during October.
Schnure explained that movements in the stock market in October mostly reflected concerns about global growth and the impact of the global economy on the United States. Worries about the strength of the U.S. dollar and its impact on U.S. firms that repatriate their foreign earnings also played a factor, according to Schnure.
Houston Ranked as Top Market for Real Estate Opportunities in 2015
Houston now offers the most attractive real estate investment and development opportunities of any major U.S. market, according to a survey from PwC and the Urban Land Institute (ULI).
Another Texas city, Austin, took second place in the 2015 survey of more than 1,000 real estate experts. San Francisco, which was ranked first in 2013 and 2014, slipped to the third position. Meanwhile, New York fell out of the top 10 to 14 in the 2015 survey. The Big Apple trailed up-and-coming cities such as Charlotte, N.C., and Nashville, Tenn.
Commercial Real Estate Poised to Gain from Positive Market Fundamentals in 2015
The commercial real estate industry is poised for broad-based growth in the coming year as performance and profitability continue to improve across most property types and markets, according to projections from consulting firm Deloitte.
The company’s 2015 outlook is supported by improving property fundamentals, a strengthening economy, easy financing, and increased domestic and international investment activity, according to Deloitte. Against that backdrop, U.S. REITs are expected to continue to outperform benchmark indices such as the S&P 500 and Russell 2000.