Despite the tempered pace of economic growth, broad-based gradual improvement is causing the Federal Reserve (Fed) to consider phasing out Quantitative Easing.
Changing interest rates introduce some credit market uncertainty, while steady, modest economic and job growth support similar gains in real estate fundamentals. Interest rates moved upward during June but had settled into a steady trading range by the end of the quarter. Most of the movement occurred in very long-term rates.
Spreads between real estate capitalization rates and US Treasuries were wide going into 2013, and remain attractive relative to other asset classes. Across the five primary property types, occupancy rates are stableto- growing and rents are increasing, leading to a period of sustainable income growth.
Source : UBS AG