REITs rise 2.6% in August

Equity REITs rose nearly 2.6 percent in August, according to the FTSE Nareit U.S. Real Estate Index Series. The strong late-summer performance gave U.S. listed REITs a total return of nearly 4.5 percent in the first eight months of the year.

The REIT market resurgence happened against a backdrop of broadly rising U.S. stocks. Year-to-date, the S&P 500 Index has returned 7.6 percent.

Only two property sectors had negative returns in August: self-storage and regional malls, down nearly 1.7 percent and 1.0 percent, respectively. The strongest performer was the healthcare sector, rising 7.1 percent in the past month.

Manufactured housing REITs — of which there are three — also clocked a strong performance in August, rising 6.4 percent. The sector has seen the highest total return year-to-date, up more than 11.5 percent. According to Nareit, manufactured housing REITs have had same-store net operating income of more than 5 percent — among the highest of any property type.

Overall, REITs saw funds from operations rise 5.5 percent in second quarter 2018, according to Nareit’s Total REIT Industry Tracker Series, to a total of $16.4 billion. In addition, occupancies at REIT-owned properties averaged 94.3 percent in the second quarter.