WASHINGTON, DC-REITs are continuing to play out one of the few success stories in commercial real estate this year. Total return of the FTSE NAREIT Equity REIT Index reached 24.7% year-to-date at the end of October.
That is nearly triple what the S&P 500 posted for the same period, according to NAREIT figures. In October, the FTSE NAREIT Equity REITs Index rose by 4.7% and the FTSE NAREIT All REITs Index gained 4.56% compared to 3.8% for the S&P 500.
Top sectors are multifamily (up 38%), hospitality (up 30.52%) and retail (up 28.28%). Mortgage REITs are also presenting an interesting case for investors, according to Brad Case, NAREIT’s vice president for research and industry information.
In fact, they are offering dividend yields on the order of 14%. “In this kind of environment, it’s awfully difficult for investors to find strong dividend yield anywhere,” Case said in a NAREIT video clip discussing the latest Index.
Like their counterparts in multifamily and office, mortgage REITs are also benefiting from a favorable capital-raising environment, Case says. They have access to multiple sources–one reason why investors are feeling bullish on their prospects going forward.