Safe house: A thawing credit market and renewed real estate activity will drive industry growth

Demand for the Real Estate Investment Trusts (REITs) industry is closely tied to the general health of the overall real estate sector and the economy. When the housing bubble burst and credit markets tightened, industry revenue dropped before quickly recovering over the early recovery. In subsequent years, the industry has grown strongly. The industry is currently benefiting from higher rents and low vacancy rates in several property markets. Well-capitalized REITs are boosting downstream construction and real estate industries by ramping up property purchases and funding construction to take advantage of low interest rates and mounting rental more.

Industry Statistics & Market Size
Annual Growth 12-17
Forecast Growth 17-22
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Industry Threats & Opportunities

  • Rising rents and low vacancy rates have and will continue to benefit the industry
  • Dire credit conditions forced REITs to get creative in raising and conserving capital
  • Favorable lending conditions and real estate values are expected to drive in new entrants
  • Industry Report - Industry Investment Chapter

    The Real Estate Investment Trusts industry requires a large amount of capital to finance its activities, making it capital intensive. For every dollar spent on wages, $4.06 is spent on capital. The industry's investment requirements are largely dependent on the type of REIT that is being analyzed. Equity REITs directly own and operate various real estate assets, and thus high levels of capital are needed to purchase property, develop properties and refurbish buildings. Mortgage REITs do not have any direct interest in real estate holdings, but instead, lend money to real estate owners and operators or extend credit indirectly through the acquisition of loans or mortgage-backed securities (MBSs). As a result, capital is needed for lending purposes and for investments in various MBSs...purchase to read more.

    Additional Insights for the Real Estate Investment Trusts Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Real Estate Investment Trusts Industry are

  • Superior financial and debt management
  • Access to investment funding
  • Access to highly skilled workforce
  • IBISWorld analysts also discuss how external factors such as Rental vacancy rates and Corporate profit in the Real Estate Investment Trusts industry impact industry performance..

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    What is the Real Estate Investment Trusts Industry?

    This industry comprises legal entities that are categorized as real estate investment trusts (REITs). REITs, like mutual funds, use the pooled capital of many investors to directly invest in income-yielding properties. To qualify as an REIT, a company or trust must distribute all of their taxable income to shareholders annually in the form of dividends. Income is largely generated from rent, interest and capital gains.

    Industry Products
  • Equity REITs - Residential properties
  • Equity REITs - Retail properties
  • Equity REITs - Other commercial properties
  • Mortgage REITs
  • Hybrid REITs
  • Industry Activities
  • Property purchasing including commercial, industrial, and residential real estate
  • Property development including commercial, industrial, and residential real estate
  • Property management including commercial, industrial, and residential real estate
  • Mortgage financing
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Rental vacancy rates
  • Corporate profit
  • Per capita disposable income
  • S&P 500
  • Yield on 10-year Treasury note

  • Current Performance
  • Asset values recover
  • Industry structure
  • Vacancy rates
  • Chart: Revenue Growth

  • Industry Outlook
  • New entrants
  • Retail property
  • Conservative approach
  • Table: Real Estate Investment Trusts Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Real Estate Investment Trusts Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Men's Clothing Stores
  • Finance and Insurance
  • Retirement & Pension Plans
  • Health & Welfare Funds
  • Open-End Investment Funds

  • Key Selling Industries
  • Finance and Insurance
  • Real Estate Sales & Brokerage

  • Products & Services
  • Equity REITs - Other commercial properties
  • Equity REITs - Retail properties
  • Equity REITs - Residential properties
  • Mortgage REITs
  • Hybrid REITs
  • Chart: Real Estate Investment Trusts Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Specialty property
  • Retail property
  • Healthcare property
  • Residential property
  • Office property
  • Lodging, resort and diversified property
  • Self-storage property
  • Chart: Major Market Segmentation for the Real Estate Investment Trusts Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Real Estate Investment Trusts

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Real Estate Investment Trusts Industry

  • Industry Globalization
    Simon Property Group Inc.Host Hotels and Resorts LP
  • Table: Simon Property Group Inc. - financial performance
  • Table: Host Hotels and Resorts LP - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Real Estate Investment Trusts Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Real Estate Investment Trusts Industry
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Rental vacancy rate (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
  • Is calculated as Debt/EBITDA (earnings before interest, taxes, depreciation, and amortization) and measures the amount of time it would require to earn enough to pay off all debt.
  • Equity Reit
  • A company that actually owns or operates its real estate investments.
  • Funds From Operations (Ffo)
  • A measurement used to define cash flow from operations for REITs calculated by adding depreciation and amortization expenses to earnings.
  • Hybrid Reit
  • A company that generates income from equity and mortgage operations, specifically rent, capital gains and interest.
  • Leadership In Energy And Environmental Design (Lee
  • An environmental building certificate program that was established under the US Green Building Council and certifies buildings that meet energy-efficiency and green requirements.
  • Loan-To-Value Ratio (Ltv)
  • A measurement used to determine how much of a property is being financed or leveraged.
  • Mezzanine Loans
  • Financing that has debt and equity characteristics and consists of equity-based options such as warrants combined with lower-priority subordinate debt.
  • Mortgage Reit
  • A company that provides real estate mortgages to real estate developers and owners.
  • Mortgage-Backed Securities (Mbss)
  • An asset-backed security or debt obligation that is secured by a mortgage or collection of mortgages.
  • Real Estate Investment Trust (Reit)
  • A legal entity that uses pooled investor capital to purchase and manage income property or mortgage loans. To qualify as an REIT, the entity must distribute at least 90.0% of taxable income.
  • Why buy this report?

    The Real Estate Investment Trusts industry market report contains data and analysis of the most influential current and future trends shaping the industry. IBISWorld’s in-depth industry market research is presented in a logical, user-friendly format, and provides growth and profit forecasts for a five-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
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    This report on Real Estate Investment Trusts:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Real Estate Investment Trusts market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Real Estate Investment Trusts, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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