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The Larger Story Behind REITs’ Operating Performance

March 6, 2017

The Larger Story Behind REITs’ Operating Performance

WASHINGTON, DC–Q4 funds from operations and net operating income all point to a real estate cycle that still has room to run, says NAREIT’s Calvin Schnure.

March 2, 2017 | by ERIKA MORPHY | GlobeSt.com

WASHINGTON, DC–Fourth quarter 2016 FFO of listed US Equity REITs recorded a 7.4% gain compared to the third quarter of 2016 and a 20.5% gain from the fourth quarter of 2015, according to NAREIT’s Total REIT Industry Tracker Series (aka its T-Tracker series). The T-Tracker is quarterly composite performance measure of the entire US listed REIT industry.

But unless you are a REIT investor or industry analyst, why should you care about this particular metric? This isn’t, after all, the widely-watched quarterly or monthly REIT returns.

And the answer to that: in many ways, the T-Tracker provides a more realistic assessment of REITs and commercial real estate prices. REIT stock prices, like all stocks, can be influenced by a number of non-industry matters. The T-Tracker, by contrast, looks at REITs’ earnings growth — which ultimately show whether or not value is being created.

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Gregory De Jong, CFP, Co-Founder of Paragon Advisors, LLC.
July 7, 2015

Blue Vault is just what advisors need to size up the different offerings in the nontraded REIT market. Just as importantly, it’s what the industry needs to encourage best practices among REITs.