WASHINGTON, DC-REITs may have posted a disappointing August, but year-to-date their returns are stellar, according to the latest NAREIT data. On a total return basis, the FTSE NAREIT All Equity REITs Index gained 5.53% and the FTSE NAREIT All REITs Index was up 4.78% for the first eight months of 2011. The S&P 500 posted a 1.77% loss for the same period. On a 12-month basis ending August 31, the S&P 500 shows greater resilience. The FTSE NAREIT All Equity REITs Index was up 18.44% and the FTSE NAREIT All REITs Index was up by 17.83%. S&P 500, for the same period, was up 18.50%.

"The current market environment, of course, is very uncertain now," Brad Case, NAREIT’s senior vice president for research and industry information, tells GlobeSt.com. That said, for commercial real estate, the bottom is close if not already at hand. "As the economy recovers I expect REIT earnings will get stronger," Case says. "REITs have access to capital at a time when there is opportunity to acquire and even start up development pipelines again."

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Macroeconomic trends are, in some cases, helping drive growth and profitability, Case says. For example, the Self-Storage sector posted a 22.96% gain for the first eight months of the year. Multifamily had a 19.72% return for the same time period. These gains are both due to the same source, Case says: a single-family home market that is in flux.

Other developments, though, are not trending REITs’ way. Mortgage REITs are closely watching a concept release the Securities and Exchange Commission has voted to release on the interpretative issues related to status under the Investment Company Act of 1940. Still in the early stages, any change in status could have a significant impact on the way mortgage REITs operate.