REITs significantly outperformed the broader stock market in February, with the FTSE Nareit All Equity REITs Index posting a total return of 7.5%, while the Dow Jones U.S. Total Stock Market and Russell 1000 both fell 0.5%.
On a year-to-date basis the All Equity REITs Index has returned 10.5% while the Dow Jones U.S. Total Stock Market is up 1.0% and the Russell 1000 has gained 0.8%. Broad market sentiment was tempered due to questions about the impact of AI on certain sectors and concerns over AI-fueled capital expenditures by some of the largest tech firms.
The yield on the 10-year Treasury fell 0.29% during the month to close at 3.96%, down from 4.26% as of Jan. 31. The dividend yield on the FTSE Nareit All Equity REITs index was 3.72% and the FTSE Nareit Mortgage REITs Index yielded 12.14%, compared to 1.10% for the S&P 500.
As shown in the chart above, data centers, specialty, and self-storage lead on a year-to-date basis, posting respective total returns of 22.3%, 21.8%, and 17.3%.
Most sectors rose in February, as reflected in the table above. Data centers, specialty, and self-storage led during the month with respective returns of 14.1%, 13.6%, and 10.3%. The office sector continued to lag, falling 9.7%, followed by timberland declining 5.0%.
The FTSE Nareit Mortgage REITs Index fell 1.0% in February. Commercial financing declined 2.4% for the month, while home financing fell 0.4%.