According to Jack McAllister, NAREIT's vice president for institutional investment affairs, REITs with small market capitalizations had the strongest performance, reversing last year's trend when the largest REITs outperformed smaller companies. He says when markets are volatile, investors find REITs attractive because of their high levels of dividends. "Predictable, reliable cash flow has become a focus for many investors today, seeking shelter from markets turbulent price changes and sky-high equity valuations," he says in an analysis.

Another sign of health for the public real estate industry is its continued ability to raise capital. "When other sectors such as technology continued to struggle to get funding or issue secondary offerings, public real estate companies raised approximately $5 billion," notes McAllister. During the first quarter, the industry had 23 secondary debt offerings totaling $3.8 billion and companies made 14 offerings of common or preferred stock totaling $1.1 billion. "As can be seen from these figures, the public real estate industry is continuing to attract both equity and debt capital from a wide group of investors."

"REITs continue to exhibit strong relative strength against other types of equities, once again highlighting the benefits of diversification for those investors that include real estate investments in their portfolio," said McAllister.