REIT Returns Recover From Dip in January

WASHINGTON, DC-US REIT returns registered a 5.06% increase in February after posting a loss of more than 4% the previous month, according to NAREIT statistics. The rise in the FTSE NAREIT All REIT Index offset January’s 4.68% loss, leaving a gain of about 1% for the year as of Mar. 3, NAREIT said.

Investors have no shortage of theories as to why REITs continue toperform well: last year, REITs’ financial activity was hallmarked byrecord equity raising, deleverating and other recycling of capital toshore up balance sheets. This year, the REIT story is playing out differently but with similar results: For the most part, the consensus is that REITs are no longer tapping equity markets to survive–but rather are turning to unsecured capital for more growth-oriented goals. To name just one example, last week Colonial Properties Trust announced it filed the necessary regulatory paperwork to sell up to $50 million worth of its common shares. The proceeds will in part used to fund new acquisitions.

Indeed, the ability to make acquisitions, for example, is behind manyREITs’ capital raising at the moment. Investors are flocking to REITsectors that are showing positive M&A activity, according to commentsmade by NAREIT vice president of research and industry informationBrad Case in the organization’s internal magazine. Retail REITs, for example, were up more than 10% in February, while apartment REITs gained 8% and lodging REITs, 6%. NAREIT did not return a call to GlobeSt.com in time for publication.