Publicly traded U.S. equity real estate investment trusts significantly underperformed the broader market in the third quarter.
The Dow Jones Equity All REIT Index recorded a total return of negative 10.8% for the period, compared to a negative 4.9% return for the S&P 500, according to S&P Global Market Intelligence data.
On a one-year basis the gap was much narrower, though REIT stocks again trailed the wider market. The S&P 500 generated a negative 15.5% return over that time period, compared with a negative 16.4% return for the Dow Jones Equity All REIT Index.
Each of the Dow Jones U.S. real estate sector indexes finished the third quarter in the red.
Self-storage REITs were the best performers as the Dow Jones U.S. Real Estate Self Storage Index experienced a total return of negative 2.6% in the quarter. The regional mall and hotel sectors followed, logging returns of negative 3.9% and negative 4.0%, respectively.
The healthcare REIT index was the worst performing property sector, posting a return of negative 15.9%. The industrial and manufactured homes REIT indexes followed with returns of negative 14.1% and negative 12.7%, respectively.
Top-performing REITs
STORE Capital Corp., which specializes in single-tenant operational real estate, posted the highest total return among U.S. REITs with market capitalizations of more than $200 million at 21.7%. An investor group comprised of GIC Pte. Ltd. and Oak Street Real Estate Capital LLC announced on Sept. 15 that it intended to buy the company in an all-cash transaction for $14 billion.
Multifamily REIT Aimco finished second, with a total return of 14.3% for the third quarter. The company was spun off from Apartment Income REIT Corp. in December 2020 with a new board and management team. As of Sept. 23, the company has achieved total stockholder returns of 56%, according to a proxy statement.
Hotel REIT Ashford Hospitality Trust Inc. rounded out the top-three performing REIT stocks, with a return of 13.9% for the quarter.
Bottom-performing REITs
Industrial Logistics Properties Trust recorded the lowest total return during the quarter, at negative 60.9%.
Diversified Healthcare Trust and Franklin Street Properties Corp. were next with returns of negative 45.3% and negative 36.8%, respectively.
