Retail sales were up 0.5% in June from the month prior, with May's numbers revised upward to a 1.3% gain, the Commerce Department reported Monday. June sales were up 6.6% year over year, with increases reported for e-commerce, furniture sellers and restaurants and decreases at clothing, supermarket, electronics and appliance retailers.
The REIT market has been in turnaround mode since February, when stock market returns began to improve after a year and a half of underperformance, according to Brad Case, Nareit senior vice president for research and industry information. "This has been a broad-based REIT recovery," he said, pointing to health care REIT and self-storage returns that both gained more than 20%, hotel REIT returns up almost 21% and retail REIT returns increasing by more than 13%.
Certain REIT subsectors are outperforming the real estate sector as a whole and are expected to continue delivering strong returns. These sectors include manufactured homes and self-storage, as well as hotels, although some investors are becoming cautious about this latter asset.
New quarterly earnings reports for US banks show that many are becoming concerned about overheating real estate markets and are scaling back lending as a result.
Inflation is a growing concern, especially after the Bureau of Labor Statistics reported that it ran at a 4.5% annualized rate during the first six months of 2018. Nareit's Brad Case reviews the empirical evidence establishing that REITs have been among the most dependable inflation-protecting assets since the high-inflation days of the 1970s.
New investors in the student housing space are entering the market because it is a defensive play, while old hands with this asset class expect to see many of these entrants fail -- allowing them to pick up assets at a good value. "Opportunities will emerge as a result of those that are taking excess risk as a result of inexperience," says Christopher Merrill, co-founder and CEO of Harrison Street Real Estate Capital.
A second data center is slated for Iron Mountain's Phoenix campus in which the REIT expects to invest $430 million over the next five years. The building, which will deliver in two phases, will total 550,000 square feet.
Alexandria Real Estate Equities has acquired a 10-story property with 350,000 rentable square feet in Manhattan's East Side medical corridor from Pfizer for $203 million. As part of the transaction, Pfizer is leasing back some of the space for at least five years.
AvalonBay Communities reportedly has a buyer for a 382-unit apartment high-rise in Arlington, Va. Swedish investor Akelius Residential is buying the property for $170 million, or $445,026 per unit, according to a source.
The 358,615-square-foot Streets of Brentwood retail center in California has been sold to Fairborne Properties. The property features a theater anchor, along with DSW, ULTA and a Sprouts Farmers Market.
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