Self-storage real estate investment trusts (REITs) trailed only apartments in the U.S. REIT market during the first quarter of 2014, according to new statistics released this week by the National Association of Real Estate Investment Trusts (NAREIT). The publicly traded self-storage sector posted a 13.12 percent increase during the quarter compared to apartments, with a 13.84 percent gain.
U.S. REIT total returns were nearly five times greater than those of the broader equity market during the first three months of the year, with nearly half of all REIT segments delivering double-digit returns, according to the report.
The total return of the FTSE NAREIT All Equity REITs Index gained 8.52 percent, and the FTSE NAREIT All REITs Index was up 8.57 percent during the period, compared to 1.81 percent for the S&P 500.
“REITs demonstrated their resiliency in the first quarter of this year,” said Steven A. Wechsler, NAREIT president and CEO. “On a long-term basis, REIT performance has been competitive with the broader market. Over the 20-year period ended this March 31, the FTSE NAREIT All REITs Index produced a compound annual total return of 10.17 percent compared with 9.53 percent for the S&P 500.
“REITs don’t, however, move in lock-step with the equity market,” he continued, “which is why they function as an important diversifier in investment portfolios, reducing overall portfolio volatility while increasing overall portfolio returns.”
FTSE is an independent company jointly owned by “The Financial Times” and the London Stock Exchange. The Index Series presents investors with a comprehensive family of REIT performance indexes spanning the commercial real estate space across the U.S. economy, offering exposure to all investment and property sectors.
As of March 31, the FTSE NAREIT All Equity REITs Index included 205 REITs with a combined equity market capitalization of $757 billion.