REIT Whitepaper - pdf click here REIT Unsecured Debt Issuance – Advantage Public REITs There has been a flurry of Unsecured Bond issuance by the Publicly Traded REITs YTD. This has strengthened corporate balance sheets and provides the REITs with a competitive advantage at a time when other CRE borrowers are struggling to access new/refinance existing debt. The collective public REIT balance sheet is in excellent shape with record low levels of leverage and ample … [Read more...]
REIT Outlook 2024
December 11, 2023 by
REIT Outlook 2024 - Pdf Click Here REIT Outlook 2024 Brighter Prospects Ahead After Two Disappointing Years 2024 Return expectations –We expect REITs will generate 8-10% total returns in 2024, approximately half comprising of a cash dividend yield of ~4%. REITs are on track to generate about 3% total returns over 2023. This is slightly below our forecast of +5-7% for Y23 a year ago as the REIT sector and capital markets have declined as the Federal Reserve has raised interest rates to curb inflation. In 2024, we assume there will be an economic … [Read more...]
Comparing BREIT and Public REITs October ’23
November 7, 2023 by
Comparing BREIT and Public REITs October '23 - pdf click here October 2023 Comparing BREIT’s Operating Performance/Management Fees to Public REITs Operational Performance is likely to be the biggest driver of future RE Returns We believe future returns from commercial real estate (CRE) investments are likely to accrue more from operational gains and less from cap rate compression and/or the use of high leverage because of the likelihood of higher interest rates in the future than those that prevailed over 2008 - 2021. Most publicly traded REITs are … [Read more...]
2Q/1H 2023 REIT Review/Outlook
July 12, 2023 by
REIT Flash Q2 2023 - Pdf Click Here 2Q/1H 2023 REIT Review/Outlook REITs Post Modest 2Q/1H Gains Underperform vs the Overall Market, 2Q and 1H. The equity market (SPX) ended 2Q23 at close to its all-time highs. Much of the gains in the SPX over 2Q and 1H were driven by the strong performance of several tech mega-caps. NASDAQ Composite was up 13.1% over 2Q23 and 32.3% over 1H23. The performance of many stocks other than those big tech companies has been … [Read more...]
1Q23 REIT Review/Outlook
April 18, 2023 by
REIT Flash Q1 2023 - Pdf Click Here REITs Post Modest Gains Amidst Volatile Markets Underperforms vs the Overall Market. REITs, as measured by the NAREIT Equity Index (total return) returned 1.7% over 1Q23. The overall market, as measured by the S&P 500 Index (total return) added 7.5% over 1Q23. Equity markets (SPX and NASDAQ) hit recent highs in Jan before falling back in Feb and March. Lower rates and portfolio rebalancing combined for an optimistic start to the year before concerns about inflation, interest rates and the economic outlook prompted a more cautious turn. … [Read more...]
Office Notes March ’23
April 10, 2023 by
Office Notes March '23 - pdf click here April 10, 2023 Summary: Office Properties seem to be caught in a Perfect Storm. While we hear of general concerns about CRE and REITs, we do regard many of the challenges being faced by offices to be specific to offices alone and that office exposure is a limited REIT problem because they are minimally represented in the NAREIT Index. This contrasts with offices representing a large part of the overall commercial real estate market. Office woes seem likely to remain in the headlines for some time; however, we believe they will see a revival in the … [Read more...]
REIT Outlook 2023
December 5, 2022 by
REIT Outlook 2023 - Pdf Click Here REIT Outlook 2023 Yield and Diversification Appeal in Uncertain Environment 2023 Return expectations –We expect REITs will generate 5-7% total returns in 2023, approximately two-thirds comprising a cash dividend yield of ~4%. REITs are on track to generate around -25% total returns over 2022. This is well below our forecast of +8-10% for Y22 which we made one year ago. The sector as well as both debt and overall equity markets have weakened principally because the Federal Reserve has aggressively raised … [Read more...]
REIT Flash 2022 Q3
October 11, 2022 by
REIT Flash Q3 2022 - Pdf Click Here REIT Stocks Declined Over Third Quarter REITs Underperformed the Overall Equity Market Over 3Q and YTD as Interest Rates have Climbed REITs, as measured by the NAREIT Equity Index (total return) returned -10.83% over 3Q22 and -27.92% over the first three quarters of Y22. The last time REITs logged three consecutive negative quarters was 1998, which marked another period of high global economic and political uncertainty. In August 1998 stock prices fell by over 14 percent, the largest one-month decline since the famous crash of October 1987. At … [Read more...]
REIT Flash 2022 Q2
July 13, 2022 by
REIT Flash Q2 2022 - Pdf Click Here “Life is like riding a bicycle. To keep your balance, you must keep moving forward” – Albert Einstein REIT Stocks Decline Over Second Quarter Modestly Underperformed the Overall Market Over 2Q and 1st Half (1H) 2022 REITs, as measured by the NAREIT Equity Index (total return) returned -17.0% over 2Q22 and -20.2% over 1H22. The overall market, as measured by the S&P 500 Index (total return) returned -16.1% over 1Q22 and -20.0% over 1H22. Macro factors – inflation, the Fed, global monetary policy and the Ukraine War have dominated … [Read more...]
Private Equity Real Estate (PERE) – Past Peak June 2022
June 27, 2022 by
Uniplan Whitepaper PERE Past Peak June 2022 - Pdf Click Here The outlook for returns from Private Equity Real Estate (PERE) has materially declined which, we believe, leaves Public REITs looking relatively attractive. Higher inflation (8.2% Y/Y CPI in May) has forced the Fed to raise interest rates (FFR +75bps in June to 1.25%) with expectations of several more increases to come. This has increased the Cost of Capital (immediately so regarding debt) and put downward pressure on asset prices. For Commercial Real Estate (CRE) this meant upward pressure on Cap Rates (lower income … [Read more...]
Offices in 2022
April 28, 2022 by
Uniplan Whitepaper Office REITs 2022 - Pdf Click Here A Relatively Inexpensive, Long-term Underperforming Sub-Sector Appears to be Taking a Turn for the Better with the Gradual Return-To-Office, Offering the Prospect of Future Outperformance. Offices underperformed the NAREIT Index in 2021 by 22.3% (+22.0% vs +44.3% index) but have outperformed in a down market over 1Q22 by 8.1% (+2.8% vs -5.3%). Sentiment has been weighed down by Work from Home (WFH)/delayed Return to Office (RTO). The ‘reopening’ theme worked in 2021 for the Malls, Shopping Centers and Apartments: Offices … [Read more...]
REIT Flash 2024 Q1
1Q24 REIT Flash - pdf click here 1Q24 REIT Review/Outlook Executive Summary REITs underperformed the broader market during the quarter. Publicly traded REITs continue to trade at a substantial discount to their net asset value (NAV) versus the private market values of their portfolios. It is our forecast that these discounts are bottoming and will begin to narrow as REIT valuations move up and private market values adjust to the generally higher cost of capital and … [Read more...]