Real estate is frequently positioned as a stabilizing element in client portfolios — an asset class that can generate income, provide inflation protection, and diversify equity risk. In principle, that framing is sound. In practice, however, not all real estate investments behave the same way, particularly during periods of market stress.
Publicly traded REITs illustrate this distinction vividly. Over long periods, public REITs have delivered attractive total returns. The FTSE Nareit Equity REIT Index has compounded at rates broadly comparable to the S&P 500 over several decades, making it tempting to describe REITs as “real estate with stock‑like returns.”
That description is accurate, but incomplete. What it leaves out is the source of those returns. Public REITs are
