Real Estate Sector After the First Half of 2018

In the first half of 2018, the real estate sector had modest returns, trailing the performance of the S&P 500. Fundamentals remain strong along with liquidity, and we see no imminent sign of a downturn for the remainder of 2018. Despite our optimism, there are a few potential headwinds that we are watching including a decrease in transaction volume, higher interest rates, higher labor costs impacting capital budgets, and continued asset selling by pubic REITs.