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- October 1, 2014: Vol. 1, Number 1

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Recovering Real Estate Market Boosts REIT Sector

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Balanced demand and supply are driving the real estate investment trust market. Stock exchange-listed U.S. equity REIT prices were up 16.25 percent, with a dividend yield of 3.52 percent in the first half of 2014, according to the National Association of Real Estate Investment Trusts. These results compare with the S&P 500 Index first-half 2014 total return of 7.14 percent and a dividend yield of 2 percent. 

Multifamily REITs have been the best performing sector due to strong rental demand and rising rents. Apartment REITs are up about 25 percent year to date. The supply of new multifamily units is being absorbed by demand, and market fundamentals are expected to remain strong over the next two years, according to a recent report from Freddie Mac. 

Some larger retail REITs, such as Simon Property Group and General Growth Properties, reported strong quarterly earnings. Student housing REITs are also a strong group, as

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