Future of Real Estate

Michael Acton, Head of Research at AEW, examines issues related to property market performance and valuations as local economies gradually reopen.

Michael Acton, Managing Director and Head of Research at AEW Capital Management, examines the future of property investment in the COVID recovery.

  • Property market performance varies considerably by property type and location, with gateway coastal cities hardest hit.
  • While policy response has been strong so far, one critical issue will be the degree to which the federal government bails out state and local governments to prevent widespread layoffs and close budget gaps.
  • The dearth of transactions will make valuation difficult for some time.
  • The Federal Reserve’s commitment to low interest rates could be positive for all assets, but particularly for property and for income-producing securities such as REITs.
  • Crises have historically accelerated trends that are already in place, and we have seen that with remote working, increased home delivery, and growing interest in the suburbs, among others.
All investing involves risk, including the risk of loss. The provision of this material and/or reference to specific securities, sectors, or markets within this material does not constitute investment advice, or a recommendation or an offer to buy or to sell any security, or an offer of any regulated financial activity. Investors should consider the investment objectives, risks and expenses of any investment carefully before investing. There can be no assurance that developments will transpire as forecasted. Actual results may vary. The views and opinions expressed are as of June 11, 2020 and may change based on market and other conditions.

Real estate investing may be subject to risks including but not limited to declines in the value of real estate, risks related to general economic conditions, changes in the value of the underlying property owned by the trust, and defaults by borrowers.