As the federal government races to lock down a trillion-dollar stimulus package, public real estate firms — from real estate investment trusts to major brokerages — edged higher Thursday, along with the broader stock market.
The FTSE Nareit All REITs index, a composite of all real estate investment trusts listed on the New York Stock Exchange, the American Stock Exchange and the NASDAQ National Market List, closed 0.42 percent higher from market open. Even Nareit’s index for hotel REITs, which have been struggling as the virus has led to global travel restrictions and bookings cancellations, was recording gains midday Thursday.
The all REITs index was relatively in line with the S&P 500, which ticked up 0.47 percent after a roller-coaster day of trading. The Dow Jones Industrial Average closed up 0.95 percent, or 188 points.
Several brokerage firms also bounced back Thursday after tumbling the day before. Realogy Holdings Corp. closed at $3.03, up 32.3 percent from market open. Newmark Group notched gains of 66 percent.
Several home building companies were also in the green. Lennar Corp., which said low interest rates were helping to fuel home purchases despite the virus, was up nearly 2.2 percent. Hovnanian Enterprises, Toll Brothers and Texas-based LGI Homes also closed higher.
The stock market has been under stress as investors pull out of equities over fears that the coronavirus pandemic will trigger a global recession. REITs, traditionally considered safer investments during periods of economic volatility because of the firms’ baked-in revenue streams, have struggled along with the broader market.
Public brokerages also have suffered, particularly on Wednesday, when the stock market lost nearly all of its gains since President Trump’s inauguration in January 2017.
Senate Republicans have been drafting a nearly $1 trillion deal to stave off further economic decline, including providing support for the airline industry and sending out individual checks to Americans. Meanwhile, coronavirus cases in the U.S. also have pushed past 10,000, and government measures to effectively stop life in America to halt the spread of the virus has led to 70,000 more unemployment insurance claims to be filed last week, the highest level since September 2017, the Department of Labor reported.
The S&P has plunged about 30 percent over the past three weeks and pushed the 10-year Treasury to a record low, moves that have triggered the Federal Reserve to slash interest rates and take other monetary policy measures — actions that should bolster the appetite for real estate acquisitions and refinancing, according to a Wednesday report from brokerage firm Marcus & Millichap.
Write to Mary Diduch at md@therealdeal.com