{"id":1004758850,"date":"2025-05-21T09:42:54","date_gmt":"2025-05-21T17:42:54","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004758850"},"modified":"2025-06-18T06:24:53","modified_gmt":"2025-06-18T14:24:53","slug":"why-tariff-turmoil-doesnt-broadly-change-fitchs-view-on-reits","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/why-tariff-turmoil-doesnt-broadly-change-fitchs-view-on-reits\/","title":{"rendered":"Why Tariff Turmoil Doesn&#8217;t Shake Up Fitch&#8217;s View on REITs"},"content":{"rendered":"<div class=\"wp-block-image\">\n<figure class=\"alignright size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"801\" height=\"620\" data-attachment-id=\"1004655512\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/office-reits-remain-on-high-alert\/chris-wimmer-cfa-3\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/04\/Chris-Wimmer-CFA.jpg\" data-orig-size=\"801,620\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;1&quot;}\" data-image-title=\"Chris Wimmer CFA\" data-image-description=\"\" data-image-caption=\"&lt;p&gt;Chris Wimmer CFA&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/04\/Chris-Wimmer-CFA.jpg?w=801\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/04\/Chris-Wimmer-CFA.jpg?w=801\" alt=\"Christopher Wimmer of Fitch Ratings\" class=\"wp-image-1004655512\" style=\"width:404px;height:auto\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/04\/Chris-Wimmer-CFA.jpg 801w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/04\/Chris-Wimmer-CFA.jpg?resize=300,232 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/04\/Chris-Wimmer-CFA.jpg?resize=768,594 768w\" sizes=\"auto, (max-width: 801px) 100vw, 801px\" \/><figcaption class=\"wp-element-caption\">Chris Wimmer <\/figcaption><\/figure><\/div>\n\n\n<p>Macroeconomic headwinds and increasing international trade upheaval have not had an immediate impact on REITs. Nonetheless, management teams have noticed that tenants\u2019 leasing decisions have slowed while they determine the impact of tariffs on their underlying businesses.<\/p>\n\n\n\n<p>The most immediate effect on REITs will be related to financing costs and capital access. REIT equity indices traded off almost 13 percent during the first week after tariffs were introduced in early April, which compares to the S&amp;P 500 loss of over 12 percent over the same period.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity has-very-light-gray-to-cyan-bluish-gray-gradient-background has-background is-style-wide\"\/>\n\n\n\n<p><strong>LIKE THIS CONTENT?<\/strong> <a href=\"https:\/\/www.commercialsearch.com\/news\/subscriptions\/\">Subscribe to the CPE Capital Markets Newsletter<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity has-very-light-gray-to-cyan-bluish-gray-gradient-background has-background is-style-wide\"\/>\n\n\n\n<p>Since then, REITs remain down only 2.3 percent, whereas the broader index has a total return of 3.9 percent, supported by new trade agreements and less threatening tariff talk. Fitch anticipates that the capital markets will remain volatile until investors, borrowers and lenders are confident that global trade has stabilized. This will place limits on construction finance, which is a net positive for REITs as they are less likely to face competition from newly built properties. More than 20 equity REITs have successfully priced new debt offerings for nearly $12.3 billion thus far this year despite volatility in benchmark rates as the all-in rates remain comparable to those prior to April.<\/p>\n\n\n\n<p>Industrial REITs\u2019 exposure to international trade is an important consideration, especially in markets with heavy China exposure like Southern California, where some weakness in new leases was noted in the first quarter. While there has been some recent supply-related softness overall, fundamental conditions remain relatively robust. Barring major long-term trade disputes, we expect leasing spreads will remain in the 20 to 30 percent range and higher. It is also worth noting that Prologis argued in its 2025 first quarter earnings remarks that trade disruptions do not necessarily result in poor market conditions for industrial property, citing the increase in domestic warehouse demand in the U.K. following Brexit.<\/p>\n\n\n\n<p>Retail REITs tend to benefit from an environment wherein there has been little new construction. However, the weakness expected from retailers and restaurants, both staple tenants of the REITs, have led Fitch to adapt deteriorating outlooks in those sectors. Strip center landlords should be at an advantage in lease negotiations given increased demand for their storefronts due to limited supply of space.<\/p>\n\n\n\n<p>Looking ahead to the second half of 2025, it will be imperative to monitor the health of consumers as confidence and spending is likely to falter should trade turmoil lead to increased economic weakness or recession.<\/p>\n\n\n\n<p><em>Chris Wimmer, CFA, is senior director with <a href=\"https:\/\/www.fitchratings.com\/\">Fitch Ratings<\/a>.<\/em><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The rating agency&#8217;s Chris Wimmer on the uneven impacts of emerging trade policies. <\/p>\n","protected":false},"author":1427,"featured_media":1004655512,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21684],"tags":[],"class_list":["post-1004758850","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-viewpoint"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - 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