Tags: REITs | bounce | back | sub-par

REITs Bounce Back from Sub-Par 2013

By    |   Sunday, 06 Apr 2014 05:06 PM

Real estate investment trusts (REITs) are rising sharply this year, as long-term interest rates have dropped and fundamentals look positive for the real estate industry.

The FTSE Nareit All Equity REIT Index has generated a total return of 9.1 percent so far this year, easily beating the S&P 500's return of 2.8 percent. In 2013, the REIT index returned only 3.2 percent, far behind the 32.4 percent return of the S&P 500.

This year is "starting to feel like a normal year," Jerry Ehlinger, who manages a REIT fund for Heitman, told The Wall Street Journal. "We've come back to an equilibrium."

Editor's Note: Secret Wall Street Calendar Uses Strange ‘Crash Alert System,’ Gets 18.79% Annual Returns

REITs lagged last year amid talk of the Federal Reserve's impending tapering of bond buying and amid rising interest rates.

Now investors are accustomed to the tapering, and long-term interest rates have dropped. The 10-year Treasury stood at 2.79 percent late Thursday afternoon, down from 3.03 percent Dec. 31.

"Everyone has started to look at earnings instead" of the Fed and interest rates, Calvin Schnure, an economist with the National Association of Real Estate Investment Trusts, told The Journal.

"If the economy really is improving, then earnings in the real-estate sector will be more than enough to compensate for rises in interest rates."

REITs apparently will be putting a lot of money to work this year. Their rate of projected purchases and spending on new projects for 2014 stands nearly 60 percent higher than their rate of projected sales, according to CoStar Group.

Editor's Note: Secret Wall Street Calendar Uses Strange ‘Crash Alert System,’ Gets 18.79% Annual Returns

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Real estate investment trusts are rising sharply this year, as long-term interest rates have dropped and fundamentals look positive for the real estate industry.
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2014-06-06
Sunday, 06 Apr 2014 05:06 PM
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