Tag Archive | ICF

Four ETFs To Play Commercial Real Estate

Despite a stubbornly weak labor market and insignificant increases in consumer sentiment and spending, commercial real estate and the exchange traded funds (ETFs) which track the sector have fared relatively well this year and are expected to continue to do so.

Commercial real estate values appear to be stabilizing as rents are no longer falling, vacancies for apartment buildings, office buildings and retail malls are no longer rising.  A major driver behind this stabilization is improved credit markets, which have enabled many real estate investment trusts (REITs) to refinance debt and issue equity which can be used to pay down debt early or buy more properties at cheap valuations.  Read More…

Three REIT ETFs That Are Shining

As the residential real estate market continues to remain volatile and highly dependent on the strength of the labor force, some signs of prosperity have emerged in real estate investment trusts (REITs) enabling the iShares Dow Jones US Real Estate (IYR), the iShares Cohen & Steers Realty Major (ICF) and the Vanguard REIT ETF (VNQ) to perform relatively well this year. 

One reason these ETFs have been trending upward is because they offer an opportunity to debt that traditional financing institutions like banks and insurance companies are unwilling to take on.  Increases in foreclosures, a weak job market and other recessionary factors have put extreme pressure on income producing properties leading to increased stress on the loans that these properties support.  As a result, an opportunity has arisen for REITs to lend, either through debt or equity financing, to the owners of these income properties.  Read More…

Three Real Estate ETFs Worth A Look

Despite woes in residential real estate, the commercial real estate sector appears to be showing signs of stabilization shinning a light on the iShares Dow Jones US Real Estate (IYR), the Vanguard REIT ETF (VNQ) and the iShares Cohen & Steers Realty Majors (ICF) .

In the month of July, vacancies in apartment buildings, office complexes, retails malls and self-storage facilities showed no significant signs of rising indicating that the sector could be starting to stabilize.   In fact, occupancy rates for apartment buildings are currently around 92 percent and around 84 for office buildings, much higher than a year ago.  Additionally, rents on commercial properties are no longer falling and numerous real estate investment trusts, known as REITs, are reducing debt on their balance sheets. Read More…

Why REITs Are Drawing Attention

As the real estate market shows some signs of prosperity, real estate investment trusts (REITs) have been drawing investor attention and for good reason.

At the commercial real estate level, REITs are attractive because they offer an opportunity to a debt market that banks, insurance companies and other financial institutions are not considering.  A weak labor force, declines in consumer spending and other recessionary factors put pressure on income producing properties and increased stress on the loans that these properties supported.  In turn, this created an opportunity for REITs to lend to these income property owners.

As for residential REITs, they are drawing attention because of their record low prices.  Some investors think that the worst has past for residential real estate and are looking to buy when prices are low.  The trends in both commercial and residential REITs have enabled the iShares Dow Jones US Real Estate (IYR) to reap the benefits.  The ETF is up 94% over last year to close at $52.67 on Wednesday.  Another notable mention is the iShares Cohen & Steers Realty Majors (ICF), which is up over 100% over the last year and closed at $60.67 on Wednesday.

This attractiveness appears to be emerging globally as well.  In fact international REITs are drawing even more attention because they earn profits in foreign currencies and are enabling investors a new way to hedge against an instable dollar.  As a result, the iShares FTSE/NAREIT Global ex-US (IFGL) has gained nearly 52% over the past year and closed at $29.90 on Wednesday. Read More…

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