Market Overview

Chicago Real Estate Stocks Rally a Year after Massive Sell-Off

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An index of nine Chicago-based real estate investment trusts (REITs) added 17.5 percent more earnings to their third-quarter revenues in September outperforming the rest of the sector, data from research firm SNL Financial showed, according to a report on Crain’s Business News.

The report said that the S&P 500 Index for the sector only gained 14.6 percent during the period based on Bloomberg data.  

Crain’s Business News noted that REITS saw a tremendous increase this year due to the job sector’s recovery which led REITs to find tenants for their office spaces.  The demand spur pushed occupancy and in turn, leases up, it said.

SNL noted growth from Strategic Hotels & Resorts Inc. which led Chicago REITs with revenue increases of 24.4 percent. Demand in the segment nearly bounced back to “2007 peak levels” the company’s CEO, Raymond Gellein, told Crain’s Business News.

Another big gainer, Retail Properties of America Inc. saw its income rise by 21.7 percent through September.

The retail REIT was in an advantageous position as lack of new retail developments in the area allowed it to be the go-to provider of retail space for expanding soft-good retailers and food and beverage companies, according to the company’s CEO Steven Grimes. The segment showed continuous recovery since the last 18 months, Grimes noted.

REITs in general have outperformed the broader market after disappointing performance for the first three quarters, the National Association of Real Estate Investment Trusts (NAREIT) said, according to investment advice website Think Advisor.com.

According to a report on the web site, the market’s strongest performers from January to September include Commercial Financing Mortgage REITS, which rose 21.57 percent; Lodging/Resorts sector, which saw revenues climb by 17.40 percent, and the Self-Storage sector, which increased earnings to 17.15 percent.

The industrial sector (up 7.46 percent), timber (6.85 percent), shopping centers (5.24 percent) and office sector (4.92 percent) also showed modest increases.

Investors who are looking at investing again in REITs will benefit on the stocks’ upside potential. Or, they could invest in companies from its sibling niche—online real estate—where start-ups are selling their technologies “like hotcakes.”

One good stock in mind is Realbiz Media Group, Inc. (OTCQB: RBIZ). Realbiz Media is a Florida-based digital media company that develops proprietary video marketing software that agents and their brokers can use to promote virtual tour listings online.

The company was reported to have developed over 28 patented technologies, as of this posting. One of its products, Nestbuilder.com, is a great platform for publishing virtual tour listings and personalized agent profiles which realtors can use as they build their network. Within a year, the consumer site has grown its number of listings to 1.6 million.

According to equity research firm Goldman Small Cap Research, the valuation of the stock is expected to rise up to $7 from $4 this year. The firm, which issued the company a speculative buy early this year, stated that the Realbiz Media’s key relationship and partnership with technology vendors and big name real estate brokerage firms will enable it to expand its virtual home tour listings network and push its valuations up.

To learn more about Realbiz Media and its products, contact sales@realbizmediagroup.com or call 1.888.REAL.BIZ (888.732.5249).

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

 

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