If 2008 had ended with September, it would have been regarded a pretty good year for REITs. In the first nine months of the year, REIT performance was slightly positive.

In the early part of 2008, U.S. REITs “looked like they were generally safe” compared to other financial stocks, says Jeremy Anagnos, managing director with CB Richard Ellis Investors’ Global Real Estate Securities program. He notes that U.S. REITs had favorable earnings reports for the first two quarters, and leasing activity remained strong, particularly in the first five months of the year. “Then we had October,” Anagnos says.

After Lehman Bros. collapsed, credit markets seized up, and the pricing of all assets became uncertain. Equities went off a cliff, and REITs went with them. Through the end of October, equity REITs had a total return of –30 percent, according to the National Association of Real Estate Investment Trusts, and the MSCI U.S. REIT Index returned –33 percent during the