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REIT Total Returns by Sector in 2008
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Significant declines in Financial and
Hotel sectors during the first 9 months of 2008 have been offset by gains
in Health Care, Residential, and Specialty sectors, resulting in an average
total return for the REIT Index of (4.6%).
Health Care has become the best performing REIT sector in 2008, up 18%,
followed by Residential and Specialty. The remaining REIT sectors have
posted negative or minimal returns. REIT prices have declined (13%)
so far in 2008, better than the (17%)
price decline for the S&P 500.
REIT returns improved during the third quarter of 2008. All sector returns,
excluding Financial/Commercial and Hotel, turned positive. Financial/Mortgage
sector had the biggest turnaround from the previous quarter, aided by renewed
investment in Thornburg Mortgage. Average total return for the REIT Index
of 6.0%, consisting of a 4% price increase and a 2% dividend contribution
(including special dividends paid during the quarter), improved dramatically
from a loss of (7.3%)
for the second quarter of 2008.
REITs trended downward during the second quarter of 2008, erasing improvements
seen during the previous quarter. Residential, Specialty, and Health Care
sector returns turned into negative territory, resulting in no sectors
posting a positive return during the second quarter of 2008. Average total
return for the REIT Index of (7.3%),
consisting of a (9%)
price decline offset by a 2% dividend contribution (including special dividends
paid during the quarter), declined from a loss of (2.4%)
for the first quarter of 2008.
REITs had regained traction from a disappointing end to 2007. REIT returns
rebounded in all sectors except Financial/Commercial during the first quarter
of 2008. Residential and Specialty sector returns turned positive while
Health Care sector returns improved from a slight gain during the fourth
quarter of 2007. Average total return for the REIT Index of (2.4%),
consisting of a (4%)
price decline offset by a 2% dividend contribution (including special dividends
paid during the quarter), improved dramatically from (13.7%)
for the fourth quarter of 2007.
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