REIT Total Returns by Sector in 2009

REIT stock prices declined (23%) during the first quarter of 2009, underperforming the (12%) price decline for the S&P 500. A 4% dividend contribution helped offset the price decline, resulting in an average total return for the REIT Index of (18%). Although REIT returns suffered further declines during the first quarter of 2009, performance was much improved compared to the fourth quarter of 2008. Financial Mortgage REITs (up 40% as upward movement in several stocks trading below $1 added to large price change increases) was the only REIT sector to post a positive total return in the first quarter of 2009. The remaining sectors posted total return declines in a range of (10%) for Financial Commercial REITs to (36%) for Retail REITs.

2008 REIT performance was impacted by the worst economic decline since World War II. Financial/Commercial (up 23% due to significant price declines resulting in extremely high yields based on dividends paid in 2008) was the only REIT sector to post a positive total return in 2008. The remaining sectors posted total returns in a range of (12%) for Health Care to (41%) for Hotel, resulting in an average total return for the REIT Index of (22%). REIT prices declined (46%) in 2008, underperforming the (38%) price decline for the S&P 500.

Significant declines in all sectors during the fourth quarter of 2008 resulted in an average total return for the REIT Index of (40.0%). REIT prices declined (41%) in the fourth quarter of 2008, worse than the (23%) price decline for the S&P 500. A 3% dividend contribution did little to offset the REIT price declines. Financial/Mortgage and Health Care were the best performing REIT sectors during the fourth quarter of 2008, each declining (28%). Financial/Commercial and Hotel were the worst performing sectors, each declining more than (55%).