REIT Market Timing

As shown in the chart below [1], Publicly traded REITs were significant net sellers of real estate prior to 2008 whereas private equity funds and institutional funds were net buyers of real estate. In 2008 the FTSE NAREIT all Equity REIT Index had a total return of -37.73% [2] so public REITs have historically shown themselves much more capable of timing market peaks than private real estate owners.

net acquisitions by REITs

[1] Chart is from NAREIT’s May 2010 report titled, “REITs: Real Estate With a Return Premium” available on www.reit.com

[2] Return pulled from NAREIT’s “Annual Returns for the FTSE NAREIT US Real Estate Index Series” report available on www.reit.com