WASHINGTON, DC-Last month US REITs outperformed the broader equity market, as well as the first seven months of 2012 and on a 12-month basis ending July 31, NAREIT reports. On a total return basis, the FTSE NAREIT All REITs Index gained 2.3% and the FTSE NAREIT All Equity REITs Index gained 2.17% for the month, while the S&P 500 rose 1.39%. For the first seven months of the year, the All REITs Index was up 18.08% and theAll Equity REITs Index was up 17.4%, compared to the S&P 500’s gain of 11.01%. And on a 12-month basis, the All REITs Index delivered a 14.79% total return and the All Equity REITs Index delivered a 13.72% gain, compared to the S&P 500’s gain of 9.13%.
“July was a modestly positive month, up 2% or so,” Michael Grupe, executive vice president of research and investor outreach, tells GlobeSt.com. “That brought year-to-date total returns to a little bit over 17%, which is just about twice as much as we had all of last year.”
Not that REITs will necessarily end the year that much further ahead, he adds. “A lot can happen between now and then, of course, but such comparisons give a sense of how the year has progressed to date.”
Another such measure is an analysis of the individual REIT sectors. At the moment the spotlight is on health care REITs, Grupe says. Clocking in at 20% or so year to date, “health care is, has been, and will be a story of growing demand given the demographic nature of our population and so over a longer period stronger performance in health care is not a surprise.”
Grupe attributes the recent uptick in health care REIT stocks as an expression of relief in response to the recent Supreme Court ruling on the health care insurance law. Almost all sectors of the US REIT market delivered double-digit gains for the first seven months of 2012, however, NAREIT noted.
Retail was the top-performing sector with a 23.57% total return, led by the regional mall subsector with a 25.11% return. Health care and retail are not the only REITs in the 20% range--the infrastructure sector was up 20.80% and timber REITs were up 18.31%. Industrial was up 16.54%; office was up 13.79% and apartments were up 13.30%.
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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.
