Media brief

New research from Wilshire Funds Management, sponsored by NAREIT and based on portfolio optimizations using 40 years of investment return data through 2015, showed that adding a range of high income-generating assets (including REITs) to a traditional retirement-stage portfolio could boost income returns by nearly 40 percent.

When Real Estate companies are removed from the Financials Sector of the S&P Dow Jones Indices and become constituents of a new Real Estate Sector on September 16, the sector will be the eight largest of the 11 headline sectors that make up the S&P 1,500 Index.

Investors seeking income found it in the Specialty REITs sector’s 6.22 percent dividend yield – nearly double the dividend yield of the FTSE NAREIT All Equity REITs Index on August 31.

Single Family Homes was the top performing property segment in the Equity REIT industry for 2016 through August.  The segment delivered a 32.56 percent total return, more than twice the total return of the FTSE NAREIT All Equity REITs Index benchmark.

REIT returns nearly doubled those of the broader equity market in the first eight months of 2016.  The FTSE NAREIT All REITs Index, the broadest benchmark of the U.S. REIT market containing both Equity and Mortgage REITs, delivered a 14.18 percent total return in the year through August.

Stock exchange-listed REITs combine the investment benefits of real estate with the benefits of a liquid market, which has become progressively more so.

Six Equity REIT sectors had dividend yields at the end of July that exceeded the yield of the FTSE NAREIT All Equity REITs Index’s 3.47 percent. 

The Free Standing Retail category led the Equity REIT market in the first seven months of the year with a 40.36 percent total return.

Stock exchange-listed U.S. REITs delivered total returns more than double those of the broader equity market in the year through July. 

The equity market capitalization of the U.S. REIT industry broke the $1 trillion mark in the second quarter of 2016.  On June 30, the 222 REITs in the FTSE NAREIT All REITs Index had a combined equity market capitalization of $1.06 trillion, up from a combined $984 billion for the 220 REITs in the same index at the end of the first quarter of the year. 

Equity REITs significantly expanded their holdings of income producing real estate in recent years, buying a total of $260 billion of commercial property between 2011 and 2015.