WASHINGTON, DC-REITs underperformed the overall stock market in Q1, according to figures from NAREIT. However, the association’s SVP of market research, Brad Case, explains in a video that such a lag is a natural part of any market cycle, with its short-term blips.

(View the Video.)

“It was another strong quarter,” he said. “It’s actually a little bit less than the broad stock market gain, but that’s to be expected, given that REITs have outperformed the broad stock market the past three years.” The total return of the S&P 500 Index for the first quarter of 2012 was 12.59% compared to the 10.49% for the FTSE NAREIT All Equity REITs Index and 10.41% for the FTSE NAREIT All REITs Index.

For the month of March, though, the REIT indexes outperformed the broad market. Also, it outpaced the S&P 500 for the preceding 12-month period. REITs outperformed the broader market in terms of dividend yields, and of course, they outpaced the scanty yield of the 10-year Treasury. As of March 31, the dividend yield of the FTSE NAREIT All REITs Index was 4.29% and the yield of the FTSE NAREIT All Equity REITs Index was 3.34% compared to 2.14% for the S&P 500 and 2.22% for 10-year Treasury.

Another sign of health from the REIT market in Q1: capital raising continued along its robust pace. NAREIT reports that, in the first quarter, publicly traded REITs raised a total of $21.2 billion, including $10.6 billion in equity. By comparison, REITs raised a total of $51.3 billion, including $31.1 billion in equity for all of last year—a record for the industry.