REITs fall nearly 5% in February, but are up 5% year-to-date

U.S. equity REITs total return fell 4.8 percent in February, according to the FTSE Nareit Equity REITs Index. On a year-to-date basis, though, REITs are still in positive territory, up nearly 5.4 percent.

The Federal Open Market Committee increased the target federal funds rate at the beginning of February, to a range of 4.5 percent to 4.75 percent, and REITs continue to show volatility triggered by rising interest rates. The drop in REIT values exceeds that of the broader stock market. The S&P 500 Index fell 2.6 percent in February, while the tech-heavy Nasdaq Composite Index dropped about 1.0 percent.

The REIT subsectors with the biggest drops in February were infrastructure (–11.8 percent), office (–10.8 percent) and lodging/resorts (–8.2 percent). The only property type to record a gain in February was self-storage, up nearly 1.7 percent. The sector saw Life Storage reject an $1