Despite uncharacteristically poor performance
in 2016 and continued softening projected for this year, experts say
there’s a positive outlook for apartment REITs in 2017.
The trusts posted a
disappointing 2.86% total return last year, in contrast to the more
than 50% growth it posted in 2014 and 2015, and experts are
blaming the results on the Fed’s decision to raise up short-term interest
rates in December, Urban Land reports. Multifamily is one of the most
interest-sensitive sectors, but execs say a slowing supply growth will push up
returns over the course of 2017. Experts are looking at a combination of
increased apartment demand (driven by Millennials), robust job growth, and a
healthy spread between U.S. Treasury rates and cap rates to benefit multifamily
fundamentals amidst increased high-end apartment supply expected for the first
half of the year. Urban Land reports experts expect supply growth to drop
again toward the end of the year, which could help multifamily REITs make up
for any ground lost. [UrbanLand]
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