Commercial real estate markets are expected to continue to firm in the next three years, albeit possibly not as robustly as during the past three, according to a recent survey of industry economists.
REITs dipped slightly in April, but the industry continued to outpace the broader market on a year-to-date basis.
The total returns of the FTSE/NAREIT All REIT Index fell 1.7 percent in April, while the S&P 500 Index added 0.4 percent. Through the end of April, the total returns of the FTSE/NAREIT All REIT Index were 4.1 percent, while the S&P 500 Index was 1.7 percent higher. The yield on the 10-year Treasury note was 0.5 percent lower during the first four months of the year.
In the latest episode of the NAREIT Podcast, Joi Mar, analyst for real estate analytics with Green Street Advisors, discussed trends in real estate asset valuations.
Mar said that despite signs of a healthy economy in the United States, the market is giving off “mixed signals.” Although the employment picture bodes well, the strength of the dollar, concerns about China and fluctuations in the energy sector are weighing on economic growth, according to Mar.
Multifamily REIT Home Properties, Inc. (NYSE: HME) said June 22 that it has agreed to be purchased by an affiliate of Lone Star Funds, a global private equity firm, in a deal valued at approximately $ 7.6 billion including debt.
Home Properties also said it agreed to contribute a portfolio of up to six properties containing up to 3,246 units to multifamily REIT UDR, Inc. (NYSE: UDR) in exchange for a combination of cash and newly issued units in a newly-formed subsidiary of UDR.
Steven Marks, managing director with Fitch Ratings, joined REIT.com for a video interview during REITWeek 2015: NAREIT’s Investor Forum, held in New York.
Marks said fundamentals in the real estate market generally held up in the first half of 2015 throughout all sectors. Fitch Ratings is projecting growth in same store net operating income (SSNOI) along the lines of 3 percent to 4 percent this year.
“Demand remains relatively steady,” said Marks, noting that GDP growth has continued.
REITs held steady in May, as concerns over interest rate increases and uneven economic data continued to put pressure on the market.
The total returns of the FTSE/NAREIT All REIT Index slipped 0.1 percent in May, while the S&P 500 Index gained 1.3 percent. The yield on the 10-year Treasury note rose 0.1 percent for the month.
Through the end of May, total returns from the FTSE/NAREIT All REIT Index were 1.0 percent lower. The S&P 500 was up 3.2 percent during the same period.
Bob O’Brien, partner and U.S. real estate services leader at Deloitte, joined REIT.com for a video interview during REITWise 2015: NAREIT’s Law, Accounting and Finance Conference held in Phoenix.
O’Brien discussed the rise in Chinese foreign investment , as well as the possibilities for a REIT regime in China.
O’Brien noted that Chinese investment in the United States has increased about seven-fold in the past five years, and real estate accounts for a significant portion of that growth.
French shopping center REIT Klepierre S.A. (Euronext Paris: LI) announced July 29 that it plans to purchase Dutch retail property company Corio NV (Euronext Amsterdam: CORA) in a transaction valued at $ 9.7 billion.
The combined property portfolio of the two companies would encompass 182 shopping centers across 16 European nations with a pro-forma gross asset value of more than $ 28 billion. The companies generated a combined net rental income of more than $ 1.6 billion in 2013.
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