U.S. REITs rose 2.7 percent in September, according to the FTSE Nareit Equity REITs Index, and increased 16.1 percent in the third quarter. That puts REIT performance into positive territory, year-to-date, with a return of 15.9 percent in the first nine months of the year.
REITs have been buoyed up by expectations of a looser monetary policy.
“The onset of the Federal Reserve’s rate-cutting cycle is expected to serve as a major catalyst for REITs, boosting valuations as discount rates fall. Historically, REITs have outperformed during similar economic conditions, and sectors with resilient, long-term cash flows are attractive today. Investors seeking real estate exposure should see this period as a compelling opportunity to benefit from REITs’ liquidity and potential for cap-rate compression,” said Todd Kellenberger, REITs portfolio manager at Principal Asset Management. He noted that this dynamic already has been in motion, with REITs beginning their recovery
