REITs and the broader equity markets have been buffeted by the off-again, on-again news about prospects for reopening the economy from the shutdowns for battling the covid-19 pandemic. In particular, downbeat reports last week from experts Dr. Anthony Fauci on the public health front and Fed Chairman Jerome Powell on the economic impact weighed on investor sentiment. The FTSE Nareit All Equity REITs index closed down 8.2% for the week ended May 15th, the first weekly decline for the month of May.
Total returns across the property sectors were all in the red. Several sectors had double-digit declines, including diversified, timber, office, lodging/resort and retail REITs, as well as commercial financing mREITs. Even the data center and infrastructure sectors, which have generally been resilient to market downdrafts due to their role in the digital economy, were down for the week.
Subsequent news on promising results on testing a vaccine against the virus led to across-the-board increases to start the week of May 18. Recent experience suggests that further gains on the public health front will be necessary in order to sustain the stock market recovery.