REIT Stocks Down Last Week Amid Tech Selloff

REIT share prices were down a bit last week as the tech selloff roiled the broader markets. The Nasdaq was down 4.1% for the week, with a cumulative decline of 7.8% in the first two weeks of September, due to concerns that the earlier runup in valuations may have been overly optimistic.

The FTSE Nareit All Equity index, in contrast, had a total return of negative 2.2% for the week, and is down 2.0% so far in September—much less than the decline in tech stocks or the broader market. Investors can reduce the overall volatility of their portfolio by holding REITs, which are exposed to a different set of forces than the broader market—rents generated by income-producing real estate do not move in lock-step with tech products and other sectors.

Two REIT property sectors declined 5% or more last week, with Lodging/resorts down 7.1% and Office down 5.3%. Most other sectors registered modest declines last week. Self storage REITs and Home financing mREITs rose, with total returns of 3.0% and 0.1%, 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.