Market Commentary

REIT share prices declined last week, with a total return of negative 3.1% on the FTSE Nareit All Equity REITs Index.

Prices on commodity futures contracts can provide an early warning of inflation trends.

REITs rose last week with a 2.5% total return on the FTSE Nareit All Equity REITs Index, the fourth consecutive weekly gain.

Despite the bumps in the road ahead, the issue of a strong recovery is no longer “if” but “when”.

REITs are up more than 20% so far this year, as of June 4.

REITs rose last week, with a total return of 2.0% on the FTSE Nareit All Equity REITs Index

As of May 21, which marks 15 months since the market peak prior to the pandemic, REIT total returns have fully recovered from the initial losses in early 2020.

REITs have reduced their reliance on borrowings, which lowered leverage ratios considerably over the past decade.

The increases came even as broader markets edged slightly lower, as seen in the negative 0.3% return on the Russell 1000.

The recovery in REIT earnings from declines early in the pandemic continued in the first quarter of 2021, according to data recently released in the Nareit T-Tracker®.

The growing use of target-date funds (TDFs) remains the dominant investment-related trend in the defined contribution and individual retirement account markets, and REITs continued to be a critical component of TDFs in 2020.

Residential REITs edged up 0.1%, but all other property sectors were in the red.