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No Correction in Real Estate Investment Trusts
Money continues to pile into physical real estate.
Fil Zucchi    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Shares of Real Estate Investment Trusts (REITs) remain oblivious to the mess in the Middle East and Ukraine, and all the other anxieties surrounding equities. 

The iShares US Real Estate ETF (NYSEARCA:IYR) is regularly pushed around by the yield on the 10-year Treasury, so with rates heading lower, it is enjoying another push toward post-crisis highs around $76.50.

The correlation between interest rates and the IYR will no doubt continue, but the real driver behind the REITs is, and will continue to be, the behavior of CMBS spreads. 

The latter have been tightening relentlessly notwithstanding rising or falling Treasury rates. In turn, tight CMBS are driving an avalanche of money into physical commercial real estate with the main problem being a scarcity of quality supply, particularly in prime markets. 

With the obligatory ups and downs, the dynamic described above will continue to support this group.

Twitter: @FZucchi

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Position in IYR.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
More From Fil Zucchi
No Correction in Real Estate Investment Trusts
Money continues to pile into physical real estate.
Fil Zucchi    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Shares of Real Estate Investment Trusts (REITs) remain oblivious to the mess in the Middle East and Ukraine, and all the other anxieties surrounding equities. 

The iShares US Real Estate ETF (NYSEARCA:IYR) is regularly pushed around by the yield on the 10-year Treasury, so with rates heading lower, it is enjoying another push toward post-crisis highs around $76.50.

The correlation between interest rates and the IYR will no doubt continue, but the real driver behind the REITs is, and will continue to be, the behavior of CMBS spreads. 

The latter have been tightening relentlessly notwithstanding rising or falling Treasury rates. In turn, tight CMBS are driving an avalanche of money into physical commercial real estate with the main problem being a scarcity of quality supply, particularly in prime markets. 

With the obligatory ups and downs, the dynamic described above will continue to support this group.

Twitter: @FZucchi

< Previous
  • 1
Next >
Position in IYR.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
More From Fil Zucchi
No Correction in Real Estate Investment Trusts
Money continues to pile into physical real estate.
Fil Zucchi    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

Shares of Real Estate Investment Trusts (REITs) remain oblivious to the mess in the Middle East and Ukraine, and all the other anxieties surrounding equities. 

The iShares US Real Estate ETF (NYSEARCA:IYR) is regularly pushed around by the yield on the 10-year Treasury, so with rates heading lower, it is enjoying another push toward post-crisis highs around $76.50.

The correlation between interest rates and the IYR will no doubt continue, but the real driver behind the REITs is, and will continue to be, the behavior of CMBS spreads. 

The latter have been tightening relentlessly notwithstanding rising or falling Treasury rates. In turn, tight CMBS are driving an avalanche of money into physical commercial real estate with the main problem being a scarcity of quality supply, particularly in prime markets. 

With the obligatory ups and downs, the dynamic described above will continue to support this group.

Twitter: @FZucchi

< Previous
  • 1
Next >
Position in IYR.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
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