Performance of REITs and Private CRE is Best Correlated Over Longer Holding Periods

May 10, 2023, 12:20 PM by Matt Mowell

Many multi-asset investors use real estate investment trusts (REITs) to gain or supplement their exposure to property without purchasing the underlying asset. However, over short time-horizons REITs can often mirror the volatility of the broader securities market rather than the steadier, income-driven performance of private equity real estate.
Performance of REITs and Private CRE is Best Correlated Over Longer Holding Periods (data available)

May 10, 2023, 12:20 PM by Matt Mowell

Many multi-asset investors use real estate investment trusts (REITs) to gain or supplement their exposure to property without purchasing the underlying asset. However, over short time-horizons REITs can often mirror the volatility of the broader securities market rather than the steadier, income-driven performance of private equity real estate.
Fundamentals Still Matter

May 2, 2023, 14:55 PM by Matt Mowell

Commercial real estate (CRE) is facing cyclical headwinds. Asset values have eroded this year due to the impact of rising interest rates and cap rates on equity and debt availability and underwriting. The stark interest rate risk has overshadowed CRE fundamentals for the time being. But we expect values will begin stabilizing later this year.
Fundamentals Still Matter (data available)

May 2, 2023, 14:55 PM by Matt Mowell

Commercial real estate (CRE) is facing cyclical headwinds. Asset values have eroded this year due to the impact of rising interest rates and cap rates on equity and debt availability and underwriting. The stark interest rate risk has overshadowed CRE fundamentals for the time being. But we expect values will begin stabilizing later this year.
Looking for green shoots? Watch the credit cycle

Apr 21, 2023, 14:46 PM by Michael Leahy

Just as velocity of money (nominal GDP/money supply) is an important driver of monetary inflation, a greater influx of cash flow into commercial real estate (CRE) is a fundamental driver of property value appreciation.
Looking for green shoots? Watch the credit cycle (data available)

Apr 21, 2023, 14:46 PM by Michael Leahy

Just as velocity of money (nominal GDP/money supply) is an important driver of monetary inflation, a greater influx of cash flow into commercial real estate (CRE) is a fundamental driver of property value appreciation.
24/7 Neighborhoods Offer Reprieve for Beleaguered Urban Office Markets (data available)

Apr 17, 2023, 10:43 AM by Matt Mowell

‘Live-Work-Shop’ neighborhoods are providing a silver lining for the beleaguered office sector. Many prominent Live-Work-Shop neighborhoods are outperforming the broader market in which they reside.
24/7 Neighborhoods Offer Reprieve for Beleaguered Urban Office Markets

Apr 17, 2023, 10:40 AM by Matt Mowell

‘Live-Work-Shop’ neighborhoods are providing a silver lining for the beleaguered office sector. Many prominent Live-Work-Shop neighborhoods are outperforming the broader market in which they reside.
The Zoom Housing Boom is Coming to An End in the U.S.

Apr 11, 2023, 16:21 PM by Matt Mowell

The Federal Reserve’s aggressive rate hikes have stalled national home price appreciation and even caused notable declines in some markets.
Small banks have larger real estate exposure (data available)

Apr 5, 2023, 11:26 AM by Matt Mowell

Today, according to the Federal Reserve, commercial real estate loans comprise 43% of smaller banks’ assets. Encouragingly, deals were underwritten at more conservative LTVs than in the years before the Global Financial Crisis, and valuations have grown significantly over the past decade— up 42% for multifamily and 14% for office. This provides some cushion for regional banks amid higher cap rates.

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