REITs Double Performance YTD

WASHINGTON, DC-NAREIT has some good news for the industry on the eve of its annual conference, REITWeek: US REITs nearly doubled their performance for the year to date ended May 31, compared with the broader equity market. They also outpaced the market in May, as well as for the preceding twelve months.

On a total return basis, the FTSE NAREIT All Equity REITs Index gained 14.13% with the FTSE NAREIT All REITs Index positing a 12.96% gain for the first five months of 2011 compared to 7.82% for the S&P 500.

For the month of May, the FTSE NAREIT All Equity REITs Index rose 1% and the FTSE NAREIT All REITs Index 0.84%. The S&P 500 fell 1.13%.

Finally, on a 12-month basis ended May 31, the FTSE NAREIT All Equity REITs Index was up 31.40% and the FTSE NAREIT All REITs Index posted a 30.33% increase. The S&P 500 rose by 25.95% during the same time period.

The asset class leading the growth was the self-storage sector with an 18.40% gain for the first five months of 2011. Following was office, with a 17.81% return; multifamily at 16.88% and then industrial, up 16.07%. Retail also posted strong gains, up 12.97%, with regional malls driving the growth with a 17.58% return.

When measured according to the 12 months ended May 31, the top performing asset classes were industrial with a 45.62% return; multifamily, at 38.7%; retail with 34.5%; and office at 29.26%. NAREIT did not return a call to GlobeSt.com in time for publication. In a new video posted to the Reit.com website, Brad Case, NAREIT SVP of research and industry information, points out the diversification benefits that REITs deliver to a portfolio.

“When you look at REIT returns over one-quarter periods, or two-quarter periods or three or four-quarter periods, the correlation between REITs and the rest of the stock market actually goes down when you have longer investment horizons,” he says.