For more than half a century, public REITs have occupied an ambiguous place in institutional portfolios. They are routinely classified as “real estate,” benchmarked against real estate indices, and often used as a liquid complement to private property holdings. Yet their long-term behavior tells a more complex story — one that becomes far clearer when equity market risk is explicitly stripped out of their performance.
Over long horizons, the FTSE Nareit Equity REIT Index has delivered total returns broadly comparable to those of the S&P 500 Index. Both have compounded at approximately low-double-digit annual rates since the 1970s. But similar headline returns do not imply similar risk, return drivers or portfolio roles. When equity beta is removed from public REIT performance,
