A REIT is a REIT is a REIT, right? No.

Sources: Bloomberg, NAREIT, and Wells Fargo Investment Institute. Data from January 1, 1994 to September 30, 2022. REIT = real estate investment trust. 12M = 12 months. 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. Investing in REITs is not appropriate for all investors.

Key Takeaways

  • REITs come in all shapes and sizes — a REIT that specializes in data centers differs wildly from a 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 in REITs.