REITs Rise During REITweek as Economic Reopening Gets Underway

REITs extended their weekly winning streak to three weeks of gains, and are up five of the past six weeks. The 9.0% total return on the FTSE Nareit All Equity REITs index in the week ended June 5th brought the year-to-date total returns back to a single-digit decline.

Last week’s returns by the various property sectors continue a recent pattern where those sectors that had been hit hardest in the early weeks of the crisis are making the strongest recovery. Retail, lodging/resorts, diversified, and commercial mREITs all had total returns exceeding 20% last week. Other sectors with double-digit positive returns include specialty, health care, timber, office, and home financing mREITs.

In contrast, data centers and infrastructure, which had been least impacted by the COVID-19 crisis as social distancing boosted utilization of the digital economy, saw a slight ease last week. These sectors, however, retain solid gains for the year of 15.9% and 17.8%, respectively.

REIT executives were cautiously optimistic about the outlook during the first-ever virtual REITweek, the industry’s annual investor conference. Conditions varied across property sectors, but a rebound in sales as the economy reopens is expected to boost rent collections and overall business conditions.

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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.