Real estate investment trusts (REITs) outperformed the broader equity market in the first quarter of 2011 according to the National Association of Real Estate Investment Trusts (NAREIT).
The FTSE NAREIT All Equity REITs Index delivered a 7.50% return in the quarter ended March 31, while the FSTE NAREIT All REITs Index showed 6.80% gains for the quarter, compared to the 5.92% gains posted for S&P 500 during the period.
The quarterly growth was reported despite negative monthly returns. The All Equity REITs Index for March was down 1.28% while the All REITs Index was down 1.38% for the month. The S&P 500 was up 0.04% for March.
For the full year, the All Equity REITs Index was up 25.02% while the all REITs Index was up 24.34%, greatly outpacing the S&P 500's 15.65% gain since March 2010. The REIT industry gains in both 2010 and 2009 were nearly 28%, compared to the S&P 500's 15% and 26% gains, respectively. Equity REITs for the first quarter were up 205% from their market cycle bottom in March 2009, but were still 18% below their peak in February 2007.
U.S. REIT equity market capitalization stood at $429 billion for the first quarter, up 10.98% from $389 billion at the end of 2010.
"Today, REITs are both financially and strategically well-positioned to continue their track record of building long-term value for their investors," said NAREIT President and CEO Steven A. Wechsler.
The NAREIT said that almost all sectors of the U.S. REIT market delivered positive returns for the first quarter, with three delivering double-digit returns. The timber REIT sector was up 24.61%, the industrial sector was up 1.17% and the self-storage sector was up 11.03%, according to the NAREIT.