REITs Little Changed Last Week

REITs were little changed last week, with total return on the FTSE Nareit All Equity REITs index down 0.4%. Broad market aggregates, including the S&P 500 and Russell 1000, edged lower by a similar amount.

Across the various REIT sectors, there were seven property sectors with gains for the week, led by lodging/resorts with a total return of 7.6%. There were five property sectors with declines, including data centers and infrastructure, which had total returns of negative 4.0% and negative 3.1%, respectively. Mortgage REIT sectors were mixed. Home financing mREITs had a positive total return of 1.6% last week while commercial financing mREITs posted a 0.7% decline.

Total returns year-to-date on the All Equity REITs index were negative 10.8% through Oct. 23. The declines last week in the data center and infrastructure sectors trim just a bit of the strong returns they had delivered in prior weeks and months, and these sectors have YTD returns of 29.9% and 10.6%, respectively. Data centers and cell towers (which make up the bulk of assets in the Infrastructure REIT sector) help support the digital economy and have seen a surge in demand during the pandemic, along with the Industrial sector, which has a total return of 13.0% so far this year.

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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.