Here’s something we haven’t heard in quite a while—U.S. REIT returns slightly underperformed the broader equity market in the first two months of the year. Despite a plague of problems in residential real estate since the economic crisis of 2008, commercial property stayed strong, leading to significant REIT outperformance in the years since. That may now be turning.
NAREIT’s monthly report does note, however, that the space still significantly outperformed the broader market for the 12 months ended Feb. 28.
On a total return basis, the FTSE NAREIT All REITs Index gained 1.29% in February and the FTSE NAREIT All Equity REITs Index gained 1.24%, while the S&P 500 was up 1.36%.
Year to date through February, the FTSE NAREIT All REITs Index gained 5.63% and the FTSE NAREIT All Equity REITs Index gained 4.94%, while the S&P 500 was up 6.61%.
For the 12 months ended February 28, the FTSE NAREIT All REITs Index was up 20.00% and the FTSE NAREIT All Equity REITs Index was up 19.19%, compared to the S&P 500’s gain of 13.46%. All sectors of the U.S. REIT market except residential delivered gains for the first two months of 2013, and all sectors except residential and diversified provided double-digit returns for the 12 months ended February 28.
Year to date through February, mortgage REITs outperformed the industry with an 11.69% total return, led by commercial financing REITs’ 20.66% return.