Real estate investment trusts (REITs) outperformed analyst expectations in the first quarter of 2010, according to a weekly report released today by Barclays Capital. Week-over-week, the National Association of Realtors‘ (NAR) composite REIT return index dropped 0.9% to 3,153.3. Despite the decrease, the index is 0.9% higher than one month ago and 33.7% higher than one year ago. The composite return index year-to-date is up 17.2% from 2,690.1 for the same period last year. In the commercial REIT sector, year-over-year returns for hotels were the greatest, up 40.5%, followed by offices, up 34.1%, office and industrial mixed properties, up 12.2%, diversified/other properties, up 11.5% and industrial properties, up 5.7%. Returns for all branches decreased over one week, except for hotels, up 1.3%. All branches showed increased return over a three month period, except for hotels, down 1.4%. In a note closing out last week’s REIT activity, the Barclays analysts note the NAREIT Equity Index decreased 1.1% on a total return basis to 7,695 from 7,778 Year to date, the NAREIT Equity Index is up 17.9%. By way of comparison, the S&P and Dow were up last week 0.4%, and 1.8%, respectively, and Nasdaq down 1.5%, on a total return basis; the S&P 500 Financials Index closed up 0.6%. In the residential REIT sector, multifamily properties had the greatest rate of return after one year, up 59.5%. Manufactured home returns after one year are up 40% and specialty housing returns are up 28.6%. Real estate mutual fund assets as of August 2010 increased to a total of $74,396, up 26.9% since the beginning of the year. The year-to-date mutual fund asset total is up 37% from assets in 2009, 86.7% from 2008 and 21.8% from 2007. Barclays expects that REIT average funds from operation (FFO) per share growth will increase by the end of 2010 to 5.6% and again to 11.2% by the end of 2011. The current rate is negative 12.6%. The firm anticipates the FFO growth rate per share to level out with Standard & Poors’ operating earnings growth expectation in 2011, which is 12.9%. Write to Christine Ricciardi.
REITs outperform Barclays expectations, long term outlook positive
Most Popular Articles
Latest Articles
NAMB partners with Roomvu on digital marketing efforts
NAMB members can use automation tools through Roomvu to market their services, create content and distribute newsletters.
-
New American Funding onboards top Chicago loan officer
-
Opinion: No benefit to home sellers is worth sacrificing first-time homebuyers
-
Weekly active inventory growth still too slow
-
While the Austin housing market isn’t sizzling, agents say it is still warm
-
CMLS looks to weigh in on the DOJ’s statement of interest