REITs May Offer Value Opportunity, According to NAREIT's February Media Update

Share Article

More data points indicate REITs may be approaching their bottom and that REIT stocks offer superior value for investors, according to the National Association of Real Estate Investment Trusts (NAREIT).

More data points indicate REITs may be approaching their bottom and that REIT stocks offer superior value for investors, according to the National Association of Real Estate Investment Trusts (NAREIT). Consider the following points:

  • In the 12-month period ending Jan. 31, 2008, REITs delivered a negative 24.03 percent total return. In the two most recent downturns (see charts on the next two pages), REITs dropped 23.79 percent and 23.9 percent, respectively. The peak-to-trough duration was 23 months and 14 months, respectively.
  • The FTSE NAREIT All REIT Index yield at Jan. 31, 2008 was 5.32 percent, up from 3.78 percent on Jan. 31, 2007 and 168 basis points above Treasuries.
  • REITs typically precede the direct real estate market on the way down and on the way back up. A new transaction-based index report from the MIT Center for Real Estate shows the value of commercial properties owned by large pension funds declined 5 percent in 2007’s fourth quarter.

In addition, REIT shares enjoyed a strong rebound in the first month of this year, according to NAREIT data.

  • The FTSE NAREIT All REIT Index’s 0.3 percent decline in January stood out as other market benchmarks took steep hits to start the year (the Dow Jones Industrials down 4.63 percent, the S&P 500 down 6 percent, the Russell 2000 down 6.82 percent, and the NASDAQ Composite down 9.89 percent).
  • REITs accelerated in the second half of January. The FTSE NAREIT All REIT Index was up 8.43 percent in the week ended Jan. 25 and 6.56 percent in the week ended Feb. 1.
  • Investors saw the strongest returns in the Mortgage (8.08 percent), Self Storage (6.06 percent) and Residential (5.53 percent) sectors in January. Home Financing REITs (up 10.70 percent) appear to be a clear example of investors looking to capitalize on a previously underperforming sector.

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 sites at http://www.nareit.com and http://www.investinreits.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

# # #

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Ron Kuykendall

Matt Bechard

202-739-9400
Email >