Equity REITs dropped in September, falling 2.54 percent according to the FTSE Nareit Equity REITs Index. Year-to-date, the index is up 1.81 percent.
The drop comes as stocks struggled broadly in September. The S&P 500 Index returned 0.43 percent in September, down from a 3.03 percent return in August. And interest rates ticked up in September, with the 10-year Treasury rising 15 basis points and the Federal Open Market Committee approving an increase of 25 basis points in the target federal funds rate.
REITs fell nearly across the board last month. The only property sector to stay in the black was industrial, which had a 0.07 percent return. Every other sector declined in September, with the biggest drops by timber (down 5.73 percent), self-storage (down 4.57 percent), healthcare (down 4.31 percent) and data centers (down 4.20 percent). Year-to-date, the strongest property sector has been manufactured homes, up 11.04 percent.
With REIT values falling even though commercial property prices are appreciating, a number of investors are finding opportunity in privatization.
