News by Topic : Industry performance

 An increase in interest rates might be cause for concern if it were predicted to come with no accompanying increase in net operating income—but it’s those changes in net operating income, not the interest rates themselves, that should attract the closest attention of investors in any equity asset such as real estate.

Mortgage REITs are an investment in real estate finance that combine high current income with long-term total return and portfolio diversification. MREITs have delivered a 21.2 percent total return over the past year, outpacing most other investments over this period.

There’s little difference between the income earned by the largest, most sophisticated investors in private equity real estate and the income earned by the smallest individual investors in listed equity REITs. 

Listed equity REITs have generally outperformed small-cap value stocks, posting slightly higher returns but substantially lower volatility and substantially better diversification benefits.

Single Family Home Rental REITs have established themselves as long-term players providing additional housing options at a time when the housing market continues to recover. 

The listed REIT industry continues to grow and prosper. Total Funds from Operations (FFO) of listed Equity REITs rose 7.9 percent in the second quarter, to $15.6 billion, according to the NAREIT T-Tracker®. 

Cambridge Associates reports that private equity real estate funds have underperformed listed equity REITs by 3.91 percentage points per year over the past 25 years.