Specialty REITs yield 8 percent returns in 2011

Real estate investment trusts that invest outside of the four major categories of office, retail, residential and industrial property have been especially successful, according to the New York Times.

REITs have outperformed other investment areas in general, but those pouring money into cell phone towers, cold storage warehouses, or transportation and energy infrastructure have thrived. The Dow Jones U.S. Specialty REIT index has returned 7.94 percent compared to the 3.32 percent returns posted by the overall REIT index.

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Many of the properties that fall under specialty REITs run countercyclical. For example, self storage centers have benefitted from the foreclosure crisis and a shift toward rental housing in America. Trusts that invest primarily in megaplex theaters have also prospered, as the movies are a relatively cheap form of entertainment in tough economic times. Data storage centers have also posted returns thanks to increased internet usage.

As some of these specialty sectors grow, most notably self-storage, they move beyond the “specialty” category and get a a sector of their own. This often helps raise more capital as it provides investors with more clarity. [NYT]