CRE Stocks Skyrocket As Market Reaches Historic High

The Dow Jones Industrial Average rose to a record high on Tuesday, shooting over 30,000 and ending the day at 30,046, or up 1.54% compared with the day before. The S&P 500 closed 1.6% higher and the Nasdaq soared 1.3%, also nearing records.

Many, but not all, major real estate stocks likewise were on an upward trend. The FTSE Nareit All REITs Index ended Tuesday at $209.13, up 0.63%.

The market reacted buoyantly to the appointment of former Federal Reserve chair Janet Yellen as secretary of the U.S. Treasury by President-elect Joe Biden, promising COVID-19 vaccine news in recent days and the General Services Administration's announcement that it will formally allow the Biden team to begin transitioning control of the federal government.

“We believe that the recent reduction in political uncertainty in the U.S., though far from complete, is another supportive factor behind the recent stock rally,” UBS Global Wealth Management Chief Investment Officer Mark Haefele told Yahoo Finance.

Many of the largest REIT stocks by market capitalization as of early 2020 did well on Tuesday, even retail specialist Simon Property Group. Simon leapt 3.96% for the day on Tuesday, presumably as investors felt more optimistic about the long-term future of retail. As an owner of malls, Simon's share prices have taken a beating this year, down from $145.09/share on Jan. 2 to $88.79/share on Tuesday.

Equity Residential and AvalonBay Communities, the two largest multifamily REITs by market cap, were up 1.57% and 1.32% respectively on Tuesday. Welltower, the largest healthcare REIT by market cap, gained 2.92% on Tuesday, and Public Storage, the largest self-storage REIT, climbed 3%.

But the largest industrial REIT, Prologis, instead dipped 0.76% on Tuesday, a departure from a solid run this year that took its share price from $88.40/share on Jan. 2 to $98.81/share on Tuesday. REITs that specialize in cellphone towers also lost ground for the day, amid growth for the year that has mostly been sluggish or negative.

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