Did REITs Stop a Commercial Real Estate Bust?

When the residential housing market crashed this past decade, many people stood confused and surprised that the commercial side didn’t follow suit. No one cause has been found to explain this stability, but an article was just published by Frank Packer in the Journal of Portfolio Management lists REITs as the main contributer.

REITs, or real estate investment trusts, occupy large portions of commercial markets. The study claims that their involvement in the market led to commercial projects having a certain level of transparency that residential didn’t have, and that just might be what saved them. As a company, REITs are interested in being perceived as stable. Overvaluation or undervaluation of a REIT can be a good indicator of the market and specific properties, leading to a higher level of investor confidence and knowledge.

Regardless of whether or not this was the end all cause for the stability seen in commercial markets, it definitely contribued a good deal. Commercial properties have often been viewed as a pillar of stability and growth, and continue to strive even in tough times.

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Virginia MacKoul

Virginia is a graduate from the University of Florida's College of Design Construction and Planning with a degree in Sustainability and the Built Environment, and a minor in Urban Regional Planning. Virginia joined the Front Street team in 2011, as an intern. Upon graduation, Virginia joined the Front Street team full-time as the Director of Client Services. Ms. MacKoul’s addition furthers Front Street’s continued growth and expansion within Gainesville and other North Central Florida markets. She was promoted to Director of Marketing in 2014 and now manages the firm’s team of interns and oversees all marketing and branding activity. Virginia was born in Boston and moved to Lee County, Florida in 1997. Virginia graduated her high school's International Baccalaureate program and started at the University of Florida with a focus on Architecture. Virginia shares Front Street's passion of giving back to the community and those in need. Virginia's hobbies include photography, cooking, football, movies, music, and spending time with her dog, Brinkley.

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