Report Links Unemployment, REIT Performance

CHARLOTTESVILLE, VA-Even though a deal was reached–albeit barely in time–to avert a debt default crisis, the economy is still clearly struggling. Indeed, if the recovery continues trending in the direction that it has, the real estate industry is likely to feel more of an impact by these lagging fundamentals than the cutback in government spending mandated under the deal.

Unemployment measures, for example, are looking dismal at this point in time–even before the Labor Department releases its monthly statistics. ADP Employer Services just announced that US companies only added 114,000 workers in July, following a revised 145,000 in June. SNL Financial examined what this trend will mean to one major player in the commercial real estate space: REITs. As can be expected, there is a clear link between unemployment and REIT returns. SNL was unable to provide an interview to GlobeSt.com in time for publication.