WASHINGTON, DC-The REIT market came roaring back in October after a dismal slide last month. The FTSE NAREIT All REIT Total Returns Index rose 13.3% for the month, NAREIT reports, besting the broader market performance of 10.9% for the S&P 500 and the Dow Jones Industrials’ 9.5%. “This more than makes up for what we lost in September,” Brad Case, NAREIT’s senior vice president of research and industry information, tells GlobeSt.com. The gains also position REITs ahead for the year by 6.4% for all REITs and 7.4% for just the equity REITs. Last month, the Dow Jones All Equity REIT Index posted a negative 13.3%. return.
Case attributes the crash and subsequent recovery in REIT values to the roller-coaster events in Europe and lingering concerns that the economy might be heading for a double dip. With Europe’s fiscal debt crisis seemingly resolved for the time being, and indications growing that the US economy is still headed for recovery, investors returned to REITs.
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Mortgage REITs, in particular, have been very vulnerable to the events in Europe as their financing could have been significantly impacted, Case says. “For equity REITs, the risk was if the governments did not come to an agreement it would derail the economic recovery.”
Lodging REITs were the biggest beneficiary of the resurging values in October, NAREIT reported, gaining 26% for the month.
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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.
