The growing divergence between US commercial property sectors

Improving fundamentals

The prospect of higher inflation and accelerated US interest rate hikes led to significant volatility across global financial markets in Q1 2018, resulting in losses for both global real estate securities and broad equities.

Volatility in real estate stocks may continue in the short run, with investors seemingly focused on interest rates. However, bond yields in the US are rising because the economy is strengthening. We believe commercial real estate should continue to see improving operating fundamentals amid solid economic growth, steady job creation, reasonable new supply levels, and monetary conditions that should remain relatively accommodative even as stimulus is gradually withdrawn. IA to split property sector  We expect US real estate demand to moderately outpace new supply across most sectors ...