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Real Estate Investment Trusts Lose Ground In September


REITs hit a wall last month as investors showed concern regarding a potential interest rate hike, property valuations and coming supply.

While the S&P 500 index increased by 0.02% in September, the FTSE/NAREIT All REIT index fell 1.4% for the month. Total returns of the FTSE/NAREIT index for the year ending Sept. 30 was 12.6%, while the S&P 500 posted 7.8% in total returns, NAREIT reports.

“[Property] valuations are probably on the higher end of where they’ve been historically, but I don’t think they are unrealistic or wildly high,” SunTrust Robinson Humphy director of REIT equity research Michael Lewis said. Robinson said long-term rate hikes—which impact REITs far more than short-term rates—are not likely to move much. [NAREIT]