Real estate rebounds in a big way. The U.S. REIT industry significantly outperformed the broader equity market in the first half of 2010, despite global economic shocks that depressed the market in the second quarter, according to the National Association of Real Estate Investment Trusts (NAREIT).
Both the FTSE NAREIT All REITs Index, the broadest U.S. REIT index, and the FTSE NAREIT Equity REIT Index were up 5.56% on a total return basis in the first half, while the S&P 500 was down 6.65%. In the second quarter, the FTSE NAREIT All REITs Index was down 3.66% and the FTSE NAREIT Equity REIT Index was down 4.06%, while the S&P 500 tumbled 11.43%.
Over longer time frames REITs outperformed the broader equity market by even wider margins. On a one-year basis ended June 30, the FTSE NAREIT All REITs Index delivered a total return of 53.54%, and the FTSE NAREIT Equity REIT Index was up 55.98%, compared to a 14.43% gain for the S&P 500.
On a 10-year basis, the FTSE NAREIT All REITs Index achieved a compound annual total return of 10.23%, and the FTSE NAREIT Equity REIT Index delivered 10.71%. By comparison, the S&P 500′s compound annual total return over the same period was a negative1.59%.