REIT Share Prices Fall Last Week

REIT share prices measured by the FTSE Nareit All Equity total return index fell 2.3% last week. During the first three weeks of September, REITs provided a shelter from turmoil in the broader stock market, especially among technology stocks. Last week concerns about economic growth and continued consumer resiliency to COVID-19 led to REIT stocks underperforming the broader equity indexes. Consistent with earlier social distancing related selloffs, the hardest hit equity REIT sectors were Retail (-6.7%), Lodging/Resorts (-6.5%), and Diversified (-4.1%).  The two best performing sectors were Infrastructure (-0.2%) and Data Centers (-0.7%).

Both Home financing and Commercial financing mREITs gained, with total returns of 4.0% and 3.4%, respectively.

Despite the tough conditions for REIT stocks last week, for September as a whole, REITs are outperforming both the S&P 500 and Russell 1000 indexes with month-to-date returns of -4.3% for the FTSE Nareit All Equity total return index compared with -5.7% and -5.5% for the S&P 500 and Russell 1000 respectively.

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The Market Commentary blog on presents analysis of the macro- and micro-economic fundamentals impacting the REIT and commercial real estate industry. The Nareit economics team offers their commentary on the state of the market, the outlook for commercial real estate and breaking macroeconomic news. The opinions set forth here are solely those of its author(s), and do not necessarily reflect the views of the Nareit or its membership. For more, see our Terms of Use.