REITs outperform broader market in 2008

Real estate investment trusts outperformed other major market benchmarks during the first five months of the year. The FTSE NAREIT all-REIT index showed that REITs were up 6.5%, for the period, while equity REITs rose 8.2%. The Standard & Poor’s 500 stock index, by contrast, was down 3.8%. The Nasdaq Composite Index fell 4.9%, and the Russell 2000 Index, slipped 1.8%. Self-storage and residential REITs were the biggest gainers, posting returns of 21.1% and 15.6% respectively. The REIT gains have helped the group recover from last year’s trouncing when they were sold off along with financial stocks. Equity REITs posted a return of -17.8% last year. “The REIT downturn of 2007 and early 2008 mirrored the duration and severity of the downturn in 1989-1990,” according to a statement from the National Association of Real Estate Investment Trusts in Washington. “Having reached a trough in February, the REIT market has steadily risen the past three months.”