Storage, Lodging REITs Enjoy Strong November
12/03/2012 | by Carisa Chappell

Self-storage and lodging REITs had the strongest performance for the month of November, according to Brad Case, NAREIT's senior vice president for research and industry information.

In a video interview with REIT.com, Case pointed out that the lodging sector's performance was "especially interesting" because it had been one of the weakest performers year to date.

"So, what that tells me is that investors have been concerned about increases in vacation and business travel, and during November they became a bit less concerned and a little bit more sanguine about the prospects or earnings growth going forward," he said.

Case noted that mortgage REITs were the weakest performers for November. Home financing REITs were down 3.92 percent.

Case also discussed the looming fiscal cliff. He said he doubts it will have much of an effect on REIT dividends.

"The difference between REITs and other income equity that produces strong dividends is that other equities have the option to cut back on their dividends and REITs don't," Case said. "REITs are required to distribute at least 90 percent of their taxable income. That means investors looking for strong income investment stocks can find it more dependably among REITs."

As the holiday season swings into full gear, Case also mentioned its impact on retail REITs. He said retail REITs did not see a lot of movement in November, but investors were reassured by retail spending: "Investors in retail REITs have gained nearly 24 percent over the year as a whole. What that tells us is that November wasn't a month of surprises for investors in retail REITs. They had been very happy for the prospects for retail REITs and retail real estate going forward."