U.S. REITs return 0.5% in April

REITs turned in a middling performance in April, with a total return of 0.5 percent, according to the FTSE Nareit All Equity REITs Index, but are still in the red, year-to-date. Although REITs advanced 3.7 percent in March, they remain down 6.2 percent in the first four months of the year.

REITs’ performance is in line with trends affecting the broader stock market. The S&P 500 Index was virtually flat in April, with a total return of nearly 0.3 percent; year-to-date, the S&P 500 Index is down nearly 1.0 percent.

The best-performing sector was industrial, which rose 4.8 percent in April and is the only major property sector to be in positive territory year-to-date, up 1.2 percent in the first four months of 2018. Investors are responding to positive trends in the logistics industry, which is thriving amidst an e-commerce boom. That has made industrial REITs prime targets for portfolio takeovers. Recently, Prologis announced plans to acquire DCT Industrial Trust for $8.4 billion, and Gramercy Property Trust announced it would be acquired by Blackstone for $7.6 billion.

Other strong property categories in the past month include timber (with a return of 4.7 percent in April and 6.6 percent year-to-date) and hotels (4.0 percent in April, –1.2 percent year-to-date).