Market Commentary

REITs edged lower last week with a -1.2% total return on the FTSE Nareit All Equity REITs Index.

The last 12 months have seen high levels of volatility and sharp swings in sentiment.

REIT share prices declined last week, reversed a part of their recent gains, with the FTSE Nareit All Equity REITs recording a total return of -0.9%

This is the fourth week out of the past five that REITs have gained more than 1%, and last week’s increase put REITs up 4.8% for the first six weeks of the year.

All property sectors rose, led by a 9.5% return for timber REITs and 6.6% for lodging/resorts.

The pandemic left a deep mark on commercial real estate in the fourth quarter as falling demand for leased space led to a rise in vacancy rates across most property types, and rents declined.

The FTSE Nareit All Equity REITs index posted a total return of -0.7%, compared to a 3.4% loss on the Russell 1000. 

Trends in the composition of major components of the U.S. economy are the complete reverse of past recessions.

Total returns for the FTSE Nareit All Equity REITs index moved into positive territory last week, with a 1.2% weekly gain.

REITS rebounded in the second week of 2021, with a 1.9% total return on the FTSE Nareit All Equity REITs index that reversed most of the decline in the prior week.

REITs declined in the opening week of 2021, with a -2.4% total return on the FTSE Nareit All Equity REITs index.

The path of the pandemic and the vaccines will continue to hold the keys for the economy and commercial real estate, and for stock markets, in 2021.