REITs Offer Diversification and Timeliness
March 30, 2023 | Nicole Funari | Nareit
Recent research by Nareit shows that REIT returns have tended to bounce back—and even surge—after significant public and private real estate market divergences. However, timing is not the only major difference between REITs and common private real estate benchmarks.
REITs and private real estate are also different in the property sectors they cover. Over the past two decades, REITs have innovated into a broader set of property sectors. The FTSE Nareit Equity REIT index has 12 property sectors, reflecting the diversity of REIT property specialization. Equity REITs cover new and emerging property types including cell towers, data centers, self-storage, and health care, and have manufactured housing and single-family rentals in the residential sector along with apartments.
Private real estate and the private real estate benchmarks are still predominantly invested in residential (in the form of apartments), office, retail, and industrial properties (sometimes referred to as RORI).
