REITs had a bad week amid market volatility

Shares fall for some of the biggest players

New York /
Feb.February 09, 2018 04:25 PM

The new year has gone from bad to worse for real estate investment trust investors, as share prices fell amid global market volatility this week.

As of midday Friday, Vornado Realty Trust’s stock was down 4.3 percent since the beginning of the week. Boston Properties was down 4 percent, Equity Residential down 6.2 percent and SL Green Realty down 6.9 percent.

The U.S. stock market overall was set for the worst week since 2008, according to the Wall Street Journal, with the Dow Jones index having fallen by more than 7 percent.

But even before this week, REIT stocks were having a bad 2018. While the Dow Jones rose to record highs throughout January, several real estate trusts saw their stocks fall (see chart).

“REITs have underperformed significantly due to disappointing 2018 earnings guidance that has come below Street expectations,” said John Kim, a REIT analyst at BMO Capital Markets. Investors have also been spooked by rising yields on 10-year treasury yields and signs that wage inflation is picking up across the U.S. economies.

Rising rates tend to be bad news for real estate because they make mortgages more expensive and other investments, such as bonds, more appealing. The real estate industry has been keeping an anxious eye on the new Federal Reserve chairman and any change in monetary policy, as TRD broke down in the February issue.


Related Articles

arrow_forward_ios
Extell Development's Gary Barnett and 32 West 48th Street (Google Maps)

Extell makes its Diamond District hotel official

Extell makes its Diamond District hotel official
The Grand Hyatt Hotel at 109 East 42nd Street and and  RXR’s Scott Rechler (Wikipedia Commons; Getty)

Grand Hyatt redevelopment could be 1,600-foot supertall

Grand Hyatt redevelopment could be 1,600-foot supertall
CoStar’s Andrew Florance and Homesnap’s John Mazur (CoStart; LinkedIn)

CoStar to acquire Homesnap for $250M

CoStar to acquire Homesnap for $250M
From top: Park Place Mall in Tucson, AZ with Brookfield Property Partners CEO Brian Kingston; Westfield Countryside in Clearwater, FL with Unibail-Rodamco-Westfield CEO Christophe Cuvillier; and The Mall at Tuttle Crossing in Dublin, OH with Simon Property Group CEO David Simon (Google Maps, Westfield, Simon, Getty)

These are the biggest malls landlords ready to hand over to CMBS lenders

These are the biggest malls landlords ready to hand over to CMBS lenders
(iStock)

Ski resorts gear up for tough season in the shadow of pandemic

Ski resorts gear up for tough season in the shadow of pandemic
From left: 555 California Street in San Francisco, Vornado CEO Steven Roth and 1290 Sixth Avenue in Manhattan (Photos via Wikipedia Commons; Getty; Trump Org)

Vornado halts sale of office towers co-owned with Trump

Vornado halts sale of office towers co-owned with Trump
The Grace Building at 1114 Sixth Avenue (Photo via Wikipedia Commons)

Here’s what tenants are paying at Brookfield & Swig’s Grace Building

Here’s what tenants are paying at Brookfield & Swig’s Grace Building
Union Square and Mayor Bill de Blasio (Getty)

City drops bid to require special permits for Union Square hotels

City drops bid to require special permits for Union Square hotels
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...