Real estate investment trusts (REITs) have been on a tear recently, outperforming the Standard & Poor’s 500 Index in 2009, 2010, 2011, and so far this year.

But dangers loom ahead, according to a study of the top 100 publicly-traded REITs conducted by accounting and consulting firm BDO. The tenuous nature of the U.S. economic recovery represents the top problem for the REITs.

Economic growth shrank to 1.9 percent in the first quarter from 3 percent in the fourth quarter. And non-farm payrolls rose only 69,000 in May.

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“The real estate industry’s dependence on strong national and global economic conditions makes it vulnerable to high unemployment rates, reduced consumer spending and a lack of business growth,” Stuart Eisenberg, national director of real estate for BDO, says in a statement accompanying the report.

In addition, “obtaining the appropriate mix of debt and equity financing coupled with difficulties in determining the value of the properties are major risks to investors. In such a fragile real estate market, much of a REIT’s success depends on having an attractive property with financially stable tenants in a prime location.”

Other potentially troubling issues identified by REITs include the ability to make distributions, strong competition for leases and real estate, rising interest rates, and inability to sell properties quickly.

A whopping 90 percent of surveyed REITs worry about having to vie with other REITs, private equity funds and foreign investors to snag property in hot areas. And 97 percent are worried about access to capital and financing.

At some point interest rates will rise, and REITs are concerned that will curb dividends, cash flow, and refinancing.

To be sure, many investors remain bullish on the asset class. “REITs in the United States are an interesting spot,” Bill Stone, chief investment strategist at PNC Wealth Management, tells Bloomberg.

Scott Crowe, global portfolio manager at Cohen & Steers, tells Marketwatch that REITs aren’t quite as attractive after their huge gains of the past three years. But he still predicts earnings growth in high single digits for the asset class.

Marc Halle, managing director at Prudential Real Estate Investors, remains bullish on REITs. “Nothing moves up in a straight line,” he tells Marketwatch. “Real estate is a simple business of supply and demand, and a look through the major markets reveals no significant new supply down the road.”

Walter Updegrave of Money magazine acknowledges the benefits of REIT investments, but warns of their risks. “Make no mistake,” he writes.

“Despite their ability to throw off income, REITS are still equities and can be just as volatile as other stocks.”

Different sectors of the REIT universe don’t move in unison, Updegrave points out. For example, the FTSE NAREIT Index returned 8 percent last year, compared to a 22 percent gain for self-storage REITs, and a 14 percent loss for lodging and resort REITs.

Editor's Note: The Final Turning Predicted for America. See Proof.