REIT Property Sector Comparison
The retail and industrial sectors have posted the strongest total return performance over the past five years. In part, this strong performance reflects exceptionally strong returns in the past 12 months, as both the industrial and retail economies have performed better than had been expected in the current period of relatively weak economic growth.
Equity REIT Property Sector Comparison
(Data through third quarter 2002 in percent, except where noted)
 |
| |
Property Sector |
Year-to-Date Return |
1-Year Return |
3-Year Return |
5-Year Return |
Dividend Yield |
FFO Growth1 |
Market Capitalization2 |
|
| |
Industrial/Office |
1.41 |
3.77 |
14.25 |
5.56 |
7.09 |
2.31 |
48,044,933 |
|
| Office |
–4.63 |
–0.78 |
13.85 |
4.37 |
7.40 |
0.75 |
28,869,549 |
|
| |
Industrial |
16.80 |
24.97 |
18.52 |
9.29 |
6.03 |
13.02 |
10,154,944 |
|
| |
Mixed |
6.20 |
16.69 |
16.02 |
7.72 |
7.30 |
–3.91 |
9,020,439 |
|
| Retail |
18.54 |
31.34 |
20.52 |
9.92 |
6.62 |
5.05 |
38,877,930 |
|
| |
Shopping Centers |
13.44 |
22.28 |
18.67 |
8.16 |
6.97 |
5.06 |
18,361,942 |
|
| |
Regional Malls |
24.03 |
43.70 |
25.03 |
11.23 |
6.21 |
4.97 |
17,658,735 |
|
| |
Free Standing |
19.34 |
22.40 |
18.49 |
8.20 |
6.84 |
5.54 |
2,857,254 |
|
| Residential |
–6.32 |
1.33 |
12.27 |
6.75 |
7.62 |
–4.82 |
29,772,464 |
|
| |
Apartments |
–6.92 |
–11.02 |
9.77 |
5.48 |
7.68 |
–5.09 |
27,452,612 |
|
| |
Manufactured Homes |
1.43 |
5.18 |
12.12 |
7.24 |
6.92 |
–1.63 |
2,318,852 |
|
| Diversified |
3.09 |
6.45 |
11.36 |
–0.29 |
7.24 |
0.66 |
10,246,956 |
|
| Lodging/Resorts |
–1.89 |
19.78 |
7.89 |
–13.17 |
3.90 |
–24.50 |
7,812,464 |
|
| Health Care |
12.45 |
14.03 |
23.80 |
6.89 |
8.03 |
1.47 |
7,963,522 |
|
| Self Storage |
–1.22 |
3.03 |
15.98 |
6.93 |
6.04 |
–2.79 |
5,208,989 |
|
| Specialty |
–9.49 |
–1.17 |
–14.90 |
–18.22 |
9.13 |
8.49 |
5,592,310 |
|
1 Year-over-year percentage change, second quarter 2002.
2
Data in thousands of dollars.
Source: National Association of Real Estate
Investment Trusts® |
|
Caution, Yield Ahead
The average Equity REIT dividend yield less the 10-Year Treasury securities has reached a 10-year high. As of Oct. 31, 2002, the NAREIT Equity Index dividend yield spread was 338 basis points versus the long-term average (1992–2002) of 108 basis points.
Monthly Equity REIT Dividend Yield Spread1
January 1992–October 2002
1Yield spread calculated by taking the Equity REIT dividend yield less 10-year constant maturity Treasury yield.
The Returns Are In
Since their inception, REITs have provided competitive investment performance. For most time periods over the past three decades, REIT market performance, as shown by the NAREIT Equity Index, has exceeded that of many major leading U.S. benchmarks, including the Dow Jones Industrial Average, the Nasdaq Composite Index and the S&P 500 Index. And as an added bonus, REITs have outperformed with significantly less volatility.
REITs Outperform Leading U.S. Benchmarks
Compound annual total returns, in percent,
December 1971–November 2002
Dividend Scorecard
Dividends are the golden goose of the REIT industry, but many investors have been wary that poor economic conditions might cause companies to cut their dividends. However, in the third quarter of 2002 only three companies announced dividend cuts, while 21 companies instituted increases.
REIT Dividend Scorecard:
Third Quarter 2002
| |
Previous
Period |
Current
Period |
Percent
Change |
| Decreases |
| | |
| Cornerstone Realty Income Trust |
0.2800 |
0.2000 |
-28.6 |
| Plum Creek Timber Company, Inc. |
2.2800 |
1.4000 |
-38.6 |
| Post Properties, Inc. |
0.7800 |
0.4500 |
-42.3 |
| Reinstated Dividend
| |
|
|
| Boykin Lodging Company |
0.0000 |
0.1800 |
|
| Increases
| |
|
|
| AmeriVest Properties, Inc. |
0.1250 |
0.1300 |
4.0 |
| AmREIT Inc. |
0.0580 |
0.0950 |
63.8 |
| Bedford Property Investors, Inc. |
0.4800 |
0.5000 |
4.2 |
| Capital Automotive REIT |
0.3980 |
0.4020 |
1.0 |
| CBL & Associates Properties, Inc. |
0.5500 |
0.5625 |
2.3 |
| Corporate Office Properties Trust |
0.2100 |
0.2200 |
4.8 |
| Federal Realty Investment Trust |
0.4800 |
0.4850 |
1.0 |
| Genral Growth Properties, Inc. |
0.6500 |
0.7200 |
10.8 |
| Health Care Property Investors, Inc. |
0.8100 |
0.8300 |
2.5 |
| Healthcare Realty Trust Inc. |
0.6000 |
0.6050 |
0.8 |
| Home Properties of New York, Inc. |
0.6000 |
0.6100 |
1.7 |
| Kimco Realty Corporation |
0.5200 |
0.5400 |
3.8 |
| LaSalle Hotel Properties |
0.0100 |
0.2100 |
2,000.0 |
| Liberty Property Trust |
0.5900 |
0.6000 |
1.7 |
| Macerich Company |
0.5500 |
0.5700 |
3.6 |
| Mack-Cali Realty Corporation |
0.6200 |
0.6300 |
1.6 |
| Realty Income Corporation |
0.1925 |
0.1938 |
0.7 |
| Sovran Self Storage |
0.5900 |
0.6000 |
1.7 |
| Thornburg Mortgage, Inc. |
0.5700 |
0.5800 |
1.8 |
| United Mobile Homes, Inc. |
0.2175 |
0.2200 |
1.1 |
| Vornado Realty Trust |
0.6600 |
0.6800 |
3.0 |
Data as of Nov. 30, 2002
Source: Company Press Releases and SNL Financial.
Sparing No Expense
15 of the nation’s 25 largest REITs (60%) ranked by equity market
capitalization (including the five largest) either
already expense the cost of stock options or intend
to begin doing so this year, according to a NAREIT
survey. For more on why many REITs are getting ahead
of the curve on this issue, view “Expensing Options
and REITs...Perfect Together?” in the November/December
2002 issue of Portfolio.
New Year, New Money for 401(K) Plans
75% of 401(k) participants plan to contribute
the same dollar amount in 2003 as they did in 2002,
while 15% said they will contribute more
next year, according to the Gallup/ UBS Employee
Outlook Index survey.
