The National Association of Real Estate Investment Trusts (NAREIT) reported its returns for 2006, and the self-storage sector ranked third on the list with a 41.0 percent total return. According to NAREIT, the industry benefited from the reduced affordability of single-family housing, which led many consumers to choose apartment rental instead. The two top REIT performers were the office segment at 45.2 percent and the healthcare segment at 44.6 percent. Apartments came in fourth at 40.0 percent.
The primary U.S. REIT index delivered a total return of 34.35 percent for 2006, outperforming all other major U.S. equity market benchmarks for the seventh straight year. NAREIT said last year’s performance of the FTSE NAREIT All REITs Index exceeded the S&P 500 at 15.8 percent, the Dow Jones Industrials at 16.3 percent, the Russell 2000 at 18.4 percent and the NASDAQ Composite at 9.5 percent. It attributes the industry’s performance to:
- Strong fundamentals across all sectors of the U.S. Commercial real estate economy
- Increasing portfolio allocations to commercial real estate through REITs, especially among large institutional investors
- A number of mergers and acquisitions
- Steady economic growth
NAREIT is the representative voice for U.S. REITs and publicly traded real estate companies worldwide. Members are REITs and other companies that own, operate and finance income-producing real estate, as well as those firms and individuals who advise, study and service those businesses. For information, visit www.nareit.com or www.investinreits.com.