Low rates boost REITs, commercial real estate stocks

Commercial real estate is solidifying its place and outperforming the broader U.S. stock market. According to the National Association of Real Estate Investment Trusts, the stock exchange-listed U.S. equity real estate investment trusts rose 16.25 percent with a dividend yield of 3.52 percent in the first-half of 2014.

Led by multifamily apartment demand, self-storage and even some momentum in regional malls, commercial real estate has recovered quickly. Office is improving in major urban markets.

The real driver, however, for REITs is the low interest rate environment. Analysts were concerned with multifamily rental apartment buildings, the hottest REIT sector, last year. They were worried thousands of new units under construction would overwhelm potential demand.

Today, rental demand is stronger than ever and rents to continue to rise. According to a recent report by Freddie Mac, the supply of new multifamily units is absorbed by demand, and market fundamentals are expected to stay strong over the next two years. Student housing REITS, along with industrial warehouse and self-storage, are also showing strong earnings. 


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Nick Banks

Nick created Front Street Commercial Real Estate Group in 2002 and spent the first eight years developing and acquiring office and retail projects in South Florida as well as North Central Florida. In 2010 the focus of the firm was shifted to primarily serve third party clients and perform brokerage, property management and mortgage banking functions. Nick has personally developed and acquired nearly 200,000 square feet of office and retail properties in markets throughout Florida. Prior to founding Front Street, Nick was the Director of Finance and Dispositions for Stiles Corporation in Fort Lauderdale where he financed and sold over $500 million in commercial real estate. Before joining Stiles, Nick was an Associate Director at GE Capital Real Estate where he sourced over $200 million in financing throughout Florida. Nick is a graduate of the University of Florida with a degree in Finance and a concentration in Real Estate. He serves as a board member and current vice-chair for the United Way of North Central Florida where he also chairs the Development Committee. Nick is actively involved with the Gainesville Area Chamber of Commerce where he serves as a board member and committee member for the Council for Economic Outreach. He is also a recent graduate of Leadership Gainesville which is a year long leadership program hosted by the Chamber. He is a member of Grace United Methodist Church where he has served as finance chair and as a member of the leadership council. Nick serves as an advisory board member of the University of Florida Bergstrom Center for Real Estate Studies. Nick was recently named chair of the Gainesville committee for the North Florida chapter of Urban Land Institute (ULI). He is a licensed real estate broker in the State of Florida and is a long time member of the International Council of Shopping Centers.

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