WASHINGTON, DC-REIT returns surrendered in November some of the ground they have made this year, dipping slightly. The FTSE NAREIT Equity REITs Index lost 1.96% and the FTSE NAREIT All REITs Index lost 1.62%, while the S&P 500 gained 0.01%, industry association NAREIT reported.
In a video posted to the association’s web site, vice president of research and industry information Brad Case attributes the decline to investor concerns about the strength of the recovery and hesitancy about the growing debt problems in Europe. Also, he said, even bull markets have an ebb and flow in returns.
That all said, REITs have delivered stronger returns to investors than the general equity market for the year, NAREIT says. REITs have nearly tripled the performance of the S&P 500 Index in the first 11 months, with the FTSE NAREIT Equity REIT Index posting a 22.25% total return and the FTSE NAREIT All REITs Index posting a 21.88% total return for the same time period. By contrast, the S&P 500 has delivered a 7.86% total return.
Top-performing sectors include multifamily (up 41.04%), free-standing retail (up 35.28%), regional malls (up 32.65%), lodging/resorts (up 31.29%) and shopping centers (up 23.56%).
Residential mortgage REITs are also attracting attention from investors because of their strong dividend yields, Case said. In general, he added, momentum among REIT investors are building on the sense that the worst is over for the commercial real estate industry.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
