News by Topic : Media brief

The recovery in commercial real estate markets for the past several years has been uneven and often disappointing, much like the economy as a whole. 

U.S. REITs continued to outperform the broader equity market through the first four months of 2016, the National Association of Real Estate Investment Trusts (NAREIT) reported. The FTSE NAREIT All REITs Index, the broadest measure of the U.S. REIT market including both Equity REITs and Mortgage REITs, delivered a 4.09 percent total return for the first four months of the year. 

Stock exchange-listed U.S. REITs continue to offer strong yields for dividend-seeking investors, outpacing the broader equity market. At the end of April, the dividend yield of the FTSE NAREIT All REITs Index was 4.28 percent, the dividend yield of the FTSE NAREIT All Equity REITs Index was 3.86 percent, and the yield of the FTSE NAREIT Mortgage REITs Index was 11.61 percent.

Investment real estate values declined by -0.32 percent during April 2016 according to the FTSE NAREIT PureProperty® Index Series, which provides the earliest measurement of changes in the market values of properties held for investment purposes.

Eight Equity REIT property sectors and subsectors outperformed the 3.92 percent total return of the FTSE NAREIT All Equity REITs Index in the first four months of the year. Three property segments delivered double-digit total returns: Specialty REITs were up 16.77 percent; Free-standing Retail REITs were up 14.85 percent; and Data Centers gained 14.14 percent.

A number of analysts have noted that increasing construction and high property prices often presage a downturn in the sector, and have asked whether this market cycle may be approaching its 9th inning. NAREIT economists have examined data from several sources to shed further light on the question of whether the real estate sector may be approaching a correction.

At the end of April, the equity market capitalization of the 219 REITs in the FTSE NAREIT All REITs Index was $972 billion and the equity market capitalization of the 165 REITs in the FTSE NAREIT All Equity REITs Index was $914 billion.

Free Standing Retail REITs, a property segment made up primarily of REITs that lease properties on a triple net lease basis, delivered an 18.69 percent total return in the first quarter of 2016, more than three times the gain of the FTSE NAREIT All Equity REITs Index.

REITs continued to offer strong dividend yields at the end of 2016’s first quarter. The dividend yield of the FTSE NAREIT All REITs Index was 4.19 percent on March 31, the yield of the FTSE NAREIT All Equity REITs Index was 3.76 percent, and the yield of the FTSE NAREIT Mortgage REITs Index was 11.83 percent.

Equity REITs significantly outperformed the broader equity market in March and the first quarter of 2016. The total return of the FTSE NAREIT All REITs Index, the broadest benchmark of the U.S. REIT market including both Equity and Mortgage REITs, was 9.99 percent in March and 5.86 percent in the first quarter.