The Benchmark Retail Real Estate SCTR℠ Index measures the performance of publicly-traded real estate securities, including Real Estate Investment Trusts (REITs), of exchange listed companies in the U.S. that primarily own and manage retail real estate and rent space in those properties to tenants. Retail equity securities include REITs that focus on large regional malls, outlet centers, grocery-anchored shopping centers and power centers that feature big box retailers.
Portfolio Application & Uses
Risk Management &
Strategic Real Estate
Location is very important for all commercial real estate owners, but in the retail sector it is crucial and data shows staying power and stability among retail REITs, which tend to own high-quality properties in the more desirable area.
The retail environment remains very competitive, and the prospect of retailer failures, store closings, and consolidations is always a concern.
Neighborhood shopping center owners, not surprisingly, face perpetual challenges. Mall REITs own prestigious supermalls, containing more than 1 million square feet, where rental rates are high.
Advantages of Real Estate SCTRs
Correlation and risk-adjusted return metrics demonstrate that listed equity real estate investment trusts provide optimal exposure to the real estate asset class.
Allows investors to take or adjust positions quickly and efficiently by buying and selling positions corresponding to the weights of all constituents which are traded on liquid public markets such as NYSE & Nasdaq.
Provides direct access to institutional office real estate diversified over many geographic areas and management teams without investing in properties or with a real estate equity managers
Portfolio Investment Thesis
Real Estate SCTRs℠ provide tailored solutions for commercial real estate investment management. Main drivers for each real estate SCTR℠:
- Market “cap rates”
- Supply/ demand conditions
- Competition from nearby properties
- Employment growth
- Consumer and business spending
- Interest rates
- Lease revenues
- Property expenses
- Occupancy rates
- Prevailing market rental rates
- Tenant quality and replacement cost