The Federal Reserve may find it difficult to retreat from its expanded influence over financial markets even as it works to scale back its stimulus, analysts say. Changes in money markets and regulations have made the Fed more integral to the industry, they say.
Hospital operator Steward Health Care System -- a company backed by Medical Properties Trust and Cerberus Capital Management -- is reportedly buying Iasis Healthcare for $1.9 billion. Medical Properties Trust will pay $1.4 billion for 11 Iasis facilities as part of the deal.
Phillips Edison Grocery REIT I is buying the assets and third-party asset management business of Phillips Edison Limited Partnership, its sponsor, in a cash-and-stock deal valued at approximately $1 billion. The resulting REIT will have an enterprise value of $4 billion and will own a portfolio of 230 shopping centers in 32 states.
Even though REIT returns have averaged 10% over the past five years, they still look compelling for investors, writes Daren Fonda. He notes that yields average 4%, which is twice what the Standard & Poor's 500 index delivers.
Executives attending the International Council of Shopping Centers' annual convention maintain that the current state of retail is not reflective of the gloom and doom painted by the media. "We're trying to arm our people with facts so that when the questions are asked, we can say no, actually, these are the facts," said Greg Maloney, CEO of retail at JLL, who also acknowledged that the industry does have problems.
New York City retail landlords are being flexible about lease terms and rent, especially with food tenants, according to a report from the Real Estate Board of New York. In some neighborhoods, asking rents are rising, while in others they are falling, depending on local demand.
There has been a surge of demand for industrial real estate, driven by the growth in e-commerce, said Jay Leupp of Lazard's global real estate securities team.
"As demand for some real estate space has shrunk in certain markets, there's been a corresponding expansion of industrial demand and the goods that would normally have gone and sat in a grocery store or a mall," he said.
Alexandria Real Estate Equities has beaten both the Standard & Poor's 500 index equity market and its peers for several years running, writes Adam Hartung. It did this, he writes, "by identifying trends, investing early in promoting those trends and working hard to understand how trends could be leveraged to make outsized returns."
The REIT industry has changed dramatically over the career of Steve Manaker, a longtime REIT analyst who was formerly a managing director with Oppenheimer & Co. -- changes including a shift in focus from short-term goals to sustained growth over market cycles. "What was a good piece of real estate 20 years ago might not be a good piece of real estate today," he says.
Saudi Arabia's Public Investment Fund has pledged to commit $20 billion to Blackstone Group's new infrastructure fund. Blackstone hopes its fund will eventually attract $40 billion and, with leverage, will have spending power of up to $100 billion.