Case: Real estate investors
don't like uncertainty.

WASHINGTON, DC-Office REITs have staged a quiet recovery, according to new analysis from NAREIT. The organization points to year-to-date total returns for office REITs through Nov. 8 that are 12.63%, based on the FTSE NAREIT US Real Estate Index Series.

Understandably, investors that don’t follow REITs that closely might be confused. For starters, REITs’ performance in October was lackluster, although they still outperformed the broader market. The FTSE NAREIT All REIT Total Returns Index was down one-third of a percent for the month, NAREIT separately reported. The S&P 500 fell 1.85% in October. General economic uncertainty, especially before the election, was the culprit, Brad Case, NAREIT’s SVP of research and industry information, said. “Uncertainty is a tax on investors’ return.”

The current story line is that industrial REITs are outperforming their REIT counterparts, as indeed they area. Also, office REITs are still underperforming compared to US Equity REITs, which returned 16.53% in 2012 through Nov. 8.

All that said, office REITs’ recovery on a year-over-year basis is quite startling: During the same eleven-month period in 2011, office REITs posted total returns of 1.9%.

To be sure, office REITs are still facing considerable headwinds. Last month, a New York state report found that job decline on Wall Street is expected to continue—a conclusion Fitch Ratings had already factored in as it predicted a negative impact on local office REITs. On the other hand there are office REITs with a focus in other areas—or countries—that are posting solid growth. Toronto-based Dundee REIT, which recently sold off its industrial portfolio to become a pure play REIT, just reported gains across its key metrics for its quarterly results.