Line chart tracks the relative performance of 10 REIT subsectors.
Y-axis: Indexed value (indexed to 100 on 1/1/2019); x-axis: 2019 – 2021.
Performance diverges gradually, with most indexes between 80 and 120 until late February 2020. After that point performance diverges more dramatically. By the end of Q3 2021, single family homes were near 141, followed closely by industrials, near 140. Data centers were next (about 133), followed by manufactured homes (above 127), infrastructure (about 124), residential (109), office (81), health care (78), retail (71) and lodging (69).
Sources: Bloomberg, NAREIT, and Wells Fargo Investment Institute. Daily data from January 1, 2019 to September 30, 2021. REIT = real estate investment trust. Relative performance is measured by the FTSE NAREIT subsector indexes versus FTSE NAREIT All Equity REITS Index. Past performance is no guarantee of future results. An index is unmanaged and not available for direct investment. FTSE NAREIT All Equity REITs Index, a subset of the All REITs Index, is designed to track the performance of REITs representing equity interests in (as opposed to mortgages on) properties. Real estate has special risks, including the possible illiquidity of the underlying properties, credit risk, interest rate fluctuations, and the impact of varied economic conditions.
- REITs come in all shapes and sizes — an REIT that specializes in data centers differs wildly from an REIT that specializes in malls or office buildings — and returns vary widely as a result.
- Monitoring the fundamentals, valuations, trends, and performance of these different REIT subsectors can provide opportunities for investors navigating REIT land.