Real estate investment trusts that own or manage movie theaters, farms and other unique real estate led the pack in May in terms of performance.
Specialty real estate REITs posted total returns for the month of 8.2 percent, according to data through May 29 from Nareit, an industry group that tracks REIT performance. The sector — made up of seven companies — outperformed the S&P 500, which saw returns of 6.16 percent.
The sector also did better than Nareit’s broader index of 139 equity REITs. The index recorded total returns for May of 1.06 percent, underperforming against the S&P 500. So far for the year, equity REITs’ total returns are down 1.8 percent, compared to 0.5 percent for the S&P 500.
Following specialty REITs, the office sector — 17 firms — recorded the second-highest month-to-date total returns, of just over 8 percent, in May.
The worst-performing sector in May was telecommunications, or companies that collect rent on infrastructure real estate like cell towers. That sector saw month-to-date total returns fall by 5.2 percent.
However, so far for the year, telecommunications companies — there are four that Nareit tracks — are, by a wide margin, the best-performing asset class. This likely stems from the rise in demand for data. Year-to-date total returns for that group are 15.3 percent, compared to second-placing health care REITs, at 9.2 percent.
President Trump’s March announcement of reciprocal tariffs, and then their subsequent pause, caused the market to spiral. The economic whiplash continued in April, when tariffs were once again announced and then put on ice.
Total returns for equity REITs plunged in line with the S&P 500 during the second round of tariff news but then bounced back. However, equity REITs’ gains were more modest compared to the S&P 500, according to Nareit.
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