U.S. REITs underperformed the broader equity index in May, with equity REITs posting a –5.93 percent return versus the S&P 500 Index’s positive gains of 2.34 percent, according to the FTSE NAREIT U.S. REIT Index.

Jeung Hyun, portfolio manager at San Francisco Bay Area–based Adelante Capital, says the negative performance of REITs is in many ways a response to rising interest rates, which is effecting cap rates in certain property sectors, and not a reaction to the general fundamentals of the equity REIT market.

Year-to-date, though, REIT performance was strong in the first five months of 2013. All REITs returned 8.28 percent from the start of 2013 until May 31, while All Equity REITs were up by 8.74 percent. Comparatively, the S&P 500 Index returned 16.07 percent year-to-date as of May 31.

In the 12 months ending May 31, 2013, All REITs returned 18.88 percent, whil