JULY 15, 2016

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U.S. REITs close first half strong in June

by Reg Clodfelter

The U.S. REIT market finished the first half of 2016 strong as the FTSE/NAREIT All Equity REITs Index returned 6.92 percent in the month of June, bringing the index’s returns to 13.68 percent year-to-date — far outpacing the 2.83 percent total return seen in 2015.

"REITs have outperformed so far this year, and are roughly fairly valued today relative to corporate bonds and stocks,” says Lukas Hartwich, senior analyst with Green Street Advisors.

The strong month was bolstered by double-digit returns from the retail sector (10.41 percent), as well as infrastructure (10.22 percent) and data center REITs (10.84 percent). Data center REITs have had the strongest 2016 of any property type, returning 37.82 percent.

"Share prices for the data center REITs have been on a tear in recent quarters due largely to the pickup in leasing activity, particularly with cloud computing companies,” explains Hartwich. “We are sti

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