Gimme Shelter: REITs and Trade Disputes
May 14, 2019 | Calvin Schnure and Alexandra Thompson | Nareit
Bickering between the United States and China has threatened to turn into a full-blown trade war, as leaders of each country have ratcheted up tariffs on imports from the other country. Analysts fear that the impact on companies with global operations could be harsh if such brinksmanship does not lead to an agreement at the negotiating table. On May 13th, following a deterioration in rhetoric on trade negotiations over the weekend, the S&P 500 fell 2.4 percent.
REITs, in contrast to many firms in the S&P 500, have low exposures to import and export markets, as their business is driven by domestic commercial real estate markets. This domestic focus has sheltered REITs to a certain extent from the trade war risk. For example, as global equity markets posted their largest decline in four months on May 13, the FTSE Nareit All Equity REITs index was unchanged at the close…
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