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REITs Are on a Roll

Aaron Levitt Jan 03, 2018

It’s no secret that commercial real estate has been one of the best-performing asset classes since the end of the Great Recession. After being obliterated during the crisis, real estate staged one of the most impressive comebacks of all time. And as the fundamentals for apartments, offices and other properties have improved, so have the fortunes of the firms that own them.

Real estate investment trust (REIT) returns have been nothing but spectacular since the recession. Driven by rising rents and property prices, REITs are now the best-performing asset class of all time.

And the gains could continue.

With Treasury bonds and interest rates still relatively low, the REIT and commercial real estate rally could have plenty of legs left.

A Huge Winner

Housing troubles, bad mortgages and souring commercial real estate loans were basically the cause for the recession in the first place. So, it’s easy to understand why commercial real estate values dropped like a stone. However, as the economy grinded ahead, bargain hunting occurred and the recovery took hold, real estate prices began to bounce back in a major way.

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