Investors turn to REITs for stable income.

The National Association of Real Estate Investment Trusts (NAREIT) says REITs’ second-quarter operating performance recovered sharply from declines in the past two quarters.

After dipping slightly in the last quarter of 2014 and falling another 3.5% in the first quarter of this year, funds from operations for all listed U.S. equity REITs recovered 16.6% to almost $13 billion in the second quarter, according to the NAREIT T-Tracker, which measures quarterly performance of the entire U.S. stock exchange-listed REIT industry. After six months of subdued but positive year-over-year performance, FFO is up 16.5% in the second quarter, the group announced Thursday.

“REITs are benefiting from the longer-term commercial real estate up cycle and from near-term strengthening of the U.S. economy this spring,” NAREIT President and CEO Steven Wechsler said in a statement. “The economy has regained momentum with healthy demand growth following a sluggish winter.”

In spite of that momentum, share prices are down. According to FTSE and NAREIT, the total return for the FTSE NAREIT All REIT Index is up just over 1% in 2015, but REIT prices fell 1.34% year to date and 9.91% in the second quarter. By comparison, the S&P is up 2.34% for the year through Aug. 19.

REITs’ dividend yield so far this year is close to 4.1% vs. 4% in 2014.

The FTSE NAREIT All-REIT Index had a nearly 9% drop in its total return in Q2, after rising 4% in Q1. So far in Q3 (Aug. 1-19), though, the index has produced a total return of nearly 6.6%.

Total net operating income (or NOI) for U.S.-listed equity REITs increased 7.5% to $19.5 billion in the second quarter, according to NAREIT, and same-store NOI, a measure NAREIT began tracking last year, increased 3.9% in the second quarter.

Listed REITs paid $10.7 billion in dividends in the most-recent period, a 2.1% increase over the same period last year. However, dividend payments are down 7.5% from the first quarter. NAREIT attributed that to “elevated” dividend payments in the first quarter due to “substantial special, non-recurring dividend payments by several REITs.”

Ignoring those special dividends, NAREIT said total dividends increased 2.2% from the first quarter and 14% from the same period a year ago. The bulk of those dividends were from equity REITS, with $1.7 billion from mortgage REITs.  

“REITs delivered strong operating performance in absolute terms and outperformed other S&P 500 sectors in the second quarter by a wide margin,” Calvin Schnure, NAREIT’s senior vice president of research and economic analysis, said in a statement. “The growth in REIT net operating income is being driven by healthy same-store trends, reflecting rising occupancy and rent growth, coupled with ongoing expansion of the REIT sector.”

Retail REITs led the increase in FFO in the second quarter, accounting for $3.1 billion in FFO for all listed equity REITs, followed by industrial and office REITs at $2.2 billion and diversified REITs at $1.7 billion.