FTSE Nareit All REITs Index Down 3.24% in January

Weyerhaeuser's St. Helens Tree Farm in Washington. The timber sector was a top performer among REITs early in 2018.

The total returns of the FTSE Nareit All REITs Index closed January down 3.24 percent, trailing the S&P 500’s return of 5.73 percent.

The total returns from the FTSE Nareit All Equity REITs Index were down 2.95 percent, while the FTSE Nareit Mortgage REITs Index total returns fell 6.91 percent.

“REITs are still doing pretty well, but admittedly the sector is decelerating from last year,” as evidenced by fund flows out of REIT mutual funds and exchange traded funds, according to Matt Werner, portfolio manager at Chilton Capital Management.

On the positive side, dividend yields across the REIT sector are 4.7 percent or higher, Werner noted. “It’s still tough to find yields like that.”

Werner said another factor that could anchor REIT stock prices is net asset value (NAV). “When you start to trade at 10, 15, 20 percent discounts, the hope is that pension funds and others will start to get interested,” he noted.

Early REIT sector leaders included timber and infrastructure, which were up 1.26 percent and 1.75 percent, respectively, through Feb. 2.

Total returns of the FTSE EPRA/Nareit Global Real Estate Index climbed 1.32 percent in January, bolstered by positive moves in the Asia, Europe and Middle East/Africa regions.

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