Commercial real estate is an important additional asset class for the right investors via RELPs or REITs, but there are differences. Read on.
The characteristic of REITs to quickly reprice based on sentiment, due to their publicly traded nature, was very evident in 2022. This isn’t uncommon. In times of uncertainty, REIT share prices will often deviate from the actual market prices of the underlying property they hold . This means they can trade above or below the intrinsic value of the pool of real estate itself.
A price/book ratio of one would mean that the trading price of the REIT exactly reflects the current NAV. Less than one suggests the REIT is either undervalued or that investors expect its price to decline. Greater than one suggests the REIT is either overvalued or that it might be expected to grow in price. Theoretically, a REIT should trade at a price that is a slight premium above its NAV considering the benefit of its high liquidity versus physical ownership of real estate.
In all, what does this tell us? First, there is a relatively strong long-term case for investing in commercial real estate, depending on the investor. Second, publicly traded investments can be subject to rapid speculation based on fear and greed . Third, it reinforces why some choose to own real estate through the RELP structure, believing that the investment price and NAV will be closer to real market rates.
France Dernières Nouvelles, France Actualités
Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.
Another US hiring surge: 311,000 jobs despite Fed rate hikes - constructconnect.com - Daily Commercial NewsWASHINGTON - America's employers added a substantial 311,000 jobs in February, fewer than January's huge gain but enough to keep pressure on the Federal Reserve to raise interest rates aggressively to fight inflation. The unemployment rate rose to 3.6%,
Lire la suite »
A Humdrum U.S. February Jobs Report but a Shock from JOLTS - constructconnect.com - Daily Commercial NewsAt +311,000, the U.S. number on net jobs creation in February, as calculated by the Bureau of Labor Statistics (BLS), was okay. It was neither truly exciting, nor in any way disturbing. It was down from the +504,000 performance in January, but it wasn’t t
Lire la suite »
Canada bans Russian steel, aluminum imports as part of sanctions regime - constructconnect.com - Daily Commercial NewsOTTAWA — Canada is banning the import of Russian steel and aluminum as part of its sanctions regime. Deputy Prime Minister Chrystia Freeland says this will help undermine Moscow's ongoing invasion of Ukraine. The Department of Industry says Canada impor
Lire la suite »
Dish Network hit with US$469-million verdict over commercial-skipping technologyThe jury in Salt Lake City found that Dish’s AutoHop feature for skipping commercials on its Hopper set-top boxes is covered by ClearPlay’s patents
Lire la suite »
Volkswagen to build EV battery plant in Ontario - constructconnect.com - Daily Commercial NewsST. THOMAS, ONT. — Volkswagen has announced it plans to build an electric vehicle battery plant in St. Thomas, in southwestern Ontario. The European automaker says the Volkswagen Group and its battery company PowerCo will establish its first overseas “gi
Lire la suite »
Risk management aspect of focusing on price - constructconnect.com - Daily Commercial NewsWhat all the focus on price competition ignores is that price is only one component of the overall competition. Price-related competition ignores the fact a sales contract is as much about the allocation of the risk as the fixing of the price. By focu
Lire la suite »