REITs fall sharply in October
U.S. equity REITs dropped 5.11 percent in October, according to the FTSE NAREIT All Equity REITs Index, as nearly every property sector declined. Year-to-date, REITs are still in positive territory with a total return of 6.57 percent. The prospect of rising interest rates may be worrying investors in the sector, which also saw declines in September and August. Despite REIT investor jitters, commercial real estate fundamentals continue to appear strong.
The best-performing sector in October was infrastructure, which held virtually flat at 0.03 percent, according to FTSE NAREIT. The worst-performing sector was regional malls, with a total return of –10.15 percent. Year-to-date, industrial REITs have outperformed, with a total return of 26.71 percent in the first 10 months of the year. Single-family home REITs also have performed well, with a total return of 26.63 percent.