NAREIT: REIT Returns Continue to Exceed Broader Market as Recovery Continues Upward Path

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REITs continue to greatly exceed the performance in the broader market as REIT returns remain on an upward path following the market bottom in February, according to the National Association of Real Estate Investment Trusts (NAREIT).

REITs continue to greatly exceed the performance in the broader market as REIT returns remain on an upward path following the market bottom in February, according to the National Association of Real Estate Investment Trusts (NAREIT).

Even with the intense market unrest seen recently, the FTSE NAREIT Equity REIT Index is up 1.76 percent for the year, through Sept. 30. The FTSE NAREIT All REIT Index is down only 1.25 percent for the year.

By comparison, the broader market indexes have struggled through the first three quarters of 2008. The NASDAQ Composite is down 21.13 percent, the S&P 500 is down 19.29 percent, the Dow Jones Industrials is down 18.2 percent, and the Russell 2000 is down 10.38 percent

REIT total returns far outpaced S&P 500 returns on an annualized basis over multiple-year periods extending out to 35 years. REIT dividends were a major component in the superior results. Consider the following points:

  • For the past three years ended Sept. 30, 2008, U.S. equity REITs delivered a compound annual total return of 5.57 percent vs. 0.22 percent for the S&P 500. Over the past five years, equity REITs delivered a 13.46 percent compound annual total return compared to 5.17 percent for the S&P.
  • Over slightly longer periods the numbers tell the same story. For the past 10 years ended Sept. 30, 2008, U.S. equity REITs delivered a compound annual total return of 12.49 percent vs. 3.06 percent for the S&P 500. Over a 15-year period, equity REITs are at 11.24 percent compared to 8.4 percent for the S&P.

Several equity REIT sectors have posted strong returns in 2008, led by double-digit gains in the Self Storage, Health Care, Residential and Specialty sectors.

  • Due in part to strong fundamentals created by greater customer demand, Self Storage REIT returns increased 33.79 percent through the first nine months of 2008.
  • Health Care REITs were the next strongest sector, up 18.54 percent through Sept. 30, followed by Residential (up 17.08 percent) and Specialty (up 11.18 percent).

The National Association of Real Estate Investment Trusts® (NAREIT) is the representative voice for U.S. REITs and publicly traded real estate companies worldwide. Members are real estate investment trusts (REITs) and other businesses that own, operate and finance income-producing real estate, as well as those firms and individuals who advise, study and service those businesses. Visit our Web site at REIT.com.

NAREIT does not intend this press release to be a solicitation related to any particular company, nor does it intend to provide investment, legal or tax advice. Investors should consult with their own investment, legal or tax advisers regarding the appropriateness of investing in any of the securities or investment strategies discussed in this publication. Nothing herein should be construed to be an endorsement by NAREIT of any specific company or products or as an offer to sell or a solicitation to buy any security or other financial instrument or to participate in any trading strategy. NAREIT expressly disclaims any liability for the accuracy, timeliness or completeness of data in this publication. Unless otherwise indicated, all data are derived from, and apply only to, publicly traded securities. Any investment returns or performance data (past, hypothetical, or otherwise) are not necessarily indicative of future returns or performance.

Contact: Ron Kuykendall
or Matt Bechard
(202) 739-9400
1-800-3NAREIT
http://reit.com

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