Goldman Sachs Banker Expects Rise in REIT M&A

Mike Graziano, managing director with Goldman Sachs, joined REIT.com for a video interview at NAREIT’s 2015 Washington Leadership Forum.

Graziano said the rise in the number of REITs pursuing investment-grade ratings “makes a lot of sense.” He pointed out that an investment-grade rating allows for “instant and immediate access to capital.” Furthermore, it leads to a lower cost of capital.

Mike Graziano

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REITs Fall Back in February

After a solid start to the year in January, REITs lost ground in February as gains in the 10-year Treasury note prompted short-term capital flows out of the market.

Analysts stress, however, that positive fundamentals remain in place for the industry going forward.

The total returns of the FTSE NAREIT All REITs Index dipped approximately 2.6 percent in February, while the S&P 500 gained more than 5.8 percent for the month. For the year, the REIT market is up 2.9 percent, whereas the S&P 500 is up 2.6 percent.

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Fundamentally Speaking: Economy Still Gaining Strength

In the latest edition of Fundamentally Speaking, Calvin Schnure, NAREIT’s senior vice president for research and economic analysis, concludes that the United States economy continues to recover despite a mixed bag of recent data.

Schnure pointed out that the big slowdown in fourth quarter gross domestic product (GDP) after six months of increased momentum “is like the recovery we’ve had all along. It’s uneven, but it’s gathering strength.”

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Quick Study: REITs Trail S&P 500 in February

In the latest edition of Quick Study, Brad Case, NAREIT’s senior vice president for research and industry information, discussed a down month for REITs in relation to long-term real estate market cycles.

The total returns of the FTSE NAREIT All REITs Index dipped approximately 2.6 percent in February, while the S&P 500 gained more than 5.8 percent for the month. For the year, the REIT market is up 2.9 percent, whereas the S&P 500 is up 2.6 percent.

Brad Case

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Green Bonds Popular With Investors, According to REIT Executives

Mark Peternell and Mike Mas of retail REIT Regency Centers (NYSE: REG), joined REIT.com for a video interview at NAREIT’s 2015 Leader in the Light Working Forum in Reston, Va.

Peternell, the company’s vice president of sustainability, said going green can serve as a “competitive differentiator” for REITs. Regency Centers started $ 240 million worth of development and redevelopment projects in 2014.

Mark Peternell and Mike Mas

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Delinquent CMBS Loans Continue to Decline

With mountains of real estate debt coming due in the next three years, borrowers appear to be taking advantage of favorable market conditions to prepay loans tied to commercial mortgage-backed securities (CMBS).

The CMBS delinquency rate, which includes loans that are 30 days or more past due, fell to 5.66 percent in January, compared with 7.25 percent a year earlier, according to commercial real estate consulting firm Trepp LLC. It marked the 18th monthly decline in the past 20 months.

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