WASHINGTON, DC-August was a disappointing month for REITs, during which they were outperformed, albeit barely by the S&P 500. However, year-to-date they continue to still plug ahead. On a total return basis, the FTSE NAREIT All REITs Index gained 0.46% in August and the FTSE NAREIT All Equity REITs Index gained 0.12%, while the S&P 500 rose 2.25%, according to NAREIT.
For the first eight months of the year, the FTSE NAREIT All REITs Index was up 18.62% and the FTSE NAREIT All Equity REITs Index was up 17.54%, compared to the S&P 500’s gain of 13.51%. REITs also outperformed the S&P 500 on a 12-month basis: the FTSE NAREIT All REITs Index delivered a 21.46% total return and the FTSE NAREIT All Equity REITs Index delivered a 20.61% gain, compared to the S&P 500’s gain of 18%.
REITs are still in a bull market cycle, according to Brad Case, NAREIT’s senior vice president for research and industry information—but that doesn’t mean they can’t have an off month. “During a REIT bull market, you typically see about two up months for every down month, he said in a video posted to NAREIT’s website. “August was a moderate up month. I expect to see other months of just moderate progress and some other months with negative progress. But, overall, 20% per year on average returns has been the norm for the last three REIT market upturns.”
For August, retail was the top-performing sector with a 26.69% total return. Industrial was up 21.83%; office was up 14.22% and multifamily was up 9.34%.
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