Office Distress • Yields Dip • Housing Rebound

February 28, 2023 | Hoya Capital

Office Distress • Yields Dip • Housing Rebound Daily Recap Mar 23 Written By Alex Pettee, CFA U.S. equity markets were mixed Thursday while benchmark interest rates dipped to the lowest levels of the year as investors cast doubt on the Federal Reserve's economic and rate projections. After dipping nearly 2% in the final hour of trading on Wednesday, the S&P 500 finished higher by 0.3% today in another choppy session, but the Mid-Cap and Small-Cap benchmarks declined.

Real estate equities remained under pressure today despite the retreat in benchmark interest rates, with office, hotel, and retail REITs dragging on the downside. Blackstone (BX) stopped making debt payments on its Hughes Center office campus in Las Vegas with public filing citing an inability to fund future monthly payments, which follows defaults over the past two months from Pimco, Brookfield, and RXR. Western Asset Mortgage (WMC) was among the better-performers today despite reducing its dividend by about 13% to $0.35/share, but noted that its Book Value Per Share increased about 8% this year.

U.S. equity markets were mixed Thursday while benchmark interest rates dipped to the lowest levels of the year as investors cast doubt on the Federal Reserve's economic and interest rate projections. After dipping nearly 2% in the final hour of trading on Wednesday, the S&P 500 finished higher by 0.3% today in another choppy session, but the Mid-Cap 400 and Small-Cap 600 each declined by 0.5%. Technology stocks continued to defy recent banking-related headwinds as the tech-heavy Nasdaq 100 rallied another 1% today.

Real estate equities remained under pressure today despite the retreat in benchmark interest rates, with office, hotel, and retail REITs dragging on the downside. The Equity REIT Index declined 0.6% today with 16-of-18 property sectors in negative territory, while the Mortgage REIT Index declined by 1.6%. The chasm between market expectations and Federal Reserve guidance widened further in the wake of the Fed's latest rate ...