REITs Deliver Best Week Since 2016.
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REITs Deliver Best Week Since 2016.

By Feux Follets following x   2018 Mar 12, 1:57am 71 views   1 comments   watch   sfw   quote     share    

The REIT ETFs (VNQ and IYR) climbed nearly 3% this week, delivering their best week since December 2016 despite downward pressure from rising interest rates and retail concerns. Homebuilders (XHB and ITB) climbed more than 2% despite the implementation of tariffs on steel and aluminum imports.

Cell towers, hotels, and apartments were the best-performing REITs this week. Essex (ESS), UDR (UDR), SBA Communications (SBAC), and Sabra Healthcare (SBAC) each rose more than 6% this week. Malls and shopping centers were the lone sectors in negative territory. Pennsylvania REIT (PEI), Washington Prime (WPG), CBL (CBL), and Tanger (SKT) each dipped more than 7% on the week.

REITs are now lower by 9% YTD, underperforming the 4% rise in the S&P 500. Homebuilders are off by nearly 9%. The 10-Year yield has nearly 50 basis points since the start of the year.

REITs ended 2017 with a total return of roughly 5%, lower than its 20-year average annual return of 12%. Going forward, absent continued cap-rate compression, it is reasonable to expect REITs to return an average of 6-8% per year with an annual standard deviation averaging 5-15%. This risk/return profile is roughly on par with large-cap US equities.

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1   epitaph   ignore (0)   2018 Mar 12, 4:19am   ↑ like (0)   ↓ dislike (0)     quote      

Is this cracks in the foundation?