REIT Stocks Buffer Broader Market Decline

REIT stocks have provided a buffer against the broader market declines in early September. The FTSE Nareit All Equity REITs index was down 0.7% last week, while tech stocks pulled major indices much lower, with the Nasdaq down 3.3% and the S&P 500 falling 2.3%. One of the benefits of investing in REITs is that they face a different set of economic drivers and do not move lock-step with the broader market. This diversification reduces volatility and risk in the portfolio of a REIT investor.

Several REIT property sectors did decline last week. Timber REITs had a total return of -5.7%, and data centers delivered a -4.9% return. Mortgage REITs also declined last week.

Several sectors rose, however, with lodging/resorts up 2.3% and retail up 2.2%. Health care, residential, and self storage REITs also rose.

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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.