Goldman Sachs: The Worst For Commercial Real Estate Market May Be Over, But 'It Is Likely To Take Longer To Inflect Positive'
Portfolio Pulse from Piero Cingari
Goldman Sachs reports that the worst may be over for the commercial real estate (CRE) market, but a full recovery is still distant. While some cities like New York and San Francisco show improvements, high interest rates and structural issues in the office segment pose ongoing challenges. CRE-related ETFs and some stocks have shown mixed performance year-to-date.
June 28, 2024 | 7:30 pm
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NEUTRAL IMPACT
The VanEck Office And Commercial Real Estate ETF (DESK) is also down 10% year-to-date, indicating persistent difficulties in the office segment of the CRE market.
The ETF's performance mirrors the ongoing struggles in the office segment of the CRE market, as highlighted by Goldman Sachs.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
The Pacer Industrial Real Estate ETF (INDS) is down 10% year-to-date, reflecting ongoing challenges in the CRE market despite some signs of bottoming out.
Despite signs of bottoming out, the ETF's performance reflects the broader challenges in the CRE market, including high interest rates and structural issues.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Highwoods Properties, Inc. (HIW) has risen 16% year-to-date, indicating positive performance amid broader CRE market difficulties.
HIW's positive performance highlights that some CRE stocks can still achieve gains despite overall market challenges.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Net Lease Office Properties (NLOP) has risen 30% year-to-date, showing strong performance despite broader market challenges.
NLOP's strong performance indicates that certain stocks within the CRE market can still thrive despite broader challenges.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
SL Green Realty Corp. (SLG) has risen 27% year-to-date, reflecting strong performance in a challenging CRE market.
SLG's performance suggests that certain CRE stocks are resilient and can perform well even in a challenging market environment.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70