Real estate sector
The real estate sector is made up of companies that own, develop, and manage property, such as offices, apartments, shopping centers, warehouses, data centers, and cell towers, along with the services businesses that support them. Much of the is made up of , companies that own income producing property and pay out most of their to .
Returns come from two places: the rent a property produces and changes in the property's value over time. Rent tends to be steady, often locked in by long leases, which makes income across much of the fairly predictable.
Buying and building property takes a lot of capital, so real estate companies usually carry significant debt. That makes the sensitive to interest rates, both through and because higher rates tend to lower what buyers will pay for a given stream of rent. Results also vary widely by property type, so the kind of property a company owns matters as much as the label.