Houston is the home of the comeback. In February, Houston hosted Super Bowl LI, in which the New England Patriots trailed by 25 points in the third quarter only to rally back to beat the Atlanta Falcons in dramatic fashion in overtime.  The Super Bowl was a timely example of the performance of Houston’s economy and […]

Mall REITs have suffered from a steady drumbeat of negative news for several years now given the shift toward e-commerce at the expense of ‘bricks and mortar’ real estate.  Recently announced plans to close additional stores at Macy’s (NYSE: M) and Sears (NASDAQ: SHLD) have added fuel to the fire and pushed mall REITs further […]

In our 2016 Chilton REIT Forecast, we were optimistic on total returns, forecasting a base case of +10% to +12% assuming flat interest rates and cap rates.  Our projection was close as the MSCI US REIT Index (Bloomberg: RMZ) finished 2016 with a total return of +8.6%.  For reference, the Chilton REIT Composite produced a […]

Since our previous publication on November 1, 2016, there have been quite a few changes in the economic and political outlook for the US.  Surprisingly, the election results boosted equity markets to all time highs, despite pundits who suggested beforehand that a Republican sweep would be negative for the market.  The main reason for their […]

Equity REITs, as measured by the MSCI US REIT Total Return Index (Bloomberg: RMS), were down 5.7% in October for a variety of reasons, including the fear of rising interest rates and, to a lesser extent, a slowdown of growth rates in some, but not all, property types.  In an environment of low GDP growth, […]

September marked a watershed moment in the REIT historical timeline: the creation of its own top-level GICS sector, appropriately named ‘Real Estate’.  We addressed the potential long term impact of this change in our May 2016 REIT Outlook, in particular as it relates to the sector’s raised profile and new capital flows that may boost […]

The self storage sector has been the top performing property type in 2 of the past 5 calendar years.  In fact, the Bloomberg Self Storage REIT Index (Bloomberg: BBREPBST Index) has outperformed the MSCI US REIT Index (Bloomberg: RMS G) every calendar year since 2010, averaging 1,200 basis points (or bps; 1bp = 0.01%) better […]

Year to date as of July 28, 2016, the apartment REIT sector (Bloomberg: BBREAPT) has underperformed the MSCI REIT Index (Bloomberg: RMS G) by over 1,500 basis points (bps).  Investors are concerned increasing supply in key REIT markets, principally New York and San Francisco, will have a negative effect on cash flow growth if it […]

The only sure thing about trends is that they change.  Almost every retail concept is vulnerable to a new trend that could reverse years, or even decades, of profits.  We have published extensively on the opportunities and threats that have been created by the growth of ‘omni-channel’ retailing, most recently in December 2015 in a […]

Since the modern REIT era began in the early 1990’s, REITs have learned to enhance the quality of the assets held.  The best axiom for real estate quality is “location, location, location”.  Across all sectors, the best locations tend to be high barrier markets where it is difficult to build and demand is more steady.  […]