Despite a late 2008 rally in which real estate investment trusts rose more than 40 percent, the sector is experiencing tumult in the first quarter of 2009. Investors thought they had seen the low point for real estate, but performance over the three months ended March 31 has renewed their uncertainty about which companies will survive the credit crunch.
Healthcare and self-storage REITs, considered the most resistant to recession, were still down 28 percent and 32 percent respectively. Hotels and retail, which tend to be the hardest hit during a recession, were down 38 percent and 39 percent respectively for the first quarter.
The Dow Jones Equity All REIT Total Return Index, which tracks 113 stocks, posted a negative total return of 32 percent in the first quarter, slightly better than the negative 39 percent return in the fourth quarter of 2008. The index is now down about 68 percent from its February 2007 peak.
Source: Wall Street Journal, REIT Rally Turned to a Rout, as the 'Bottom' Dropped Out