Data Centers Present Rare Bright Spot For Tumbling REIT Stocks
April 8, 2020 | Kamran Rosen | Forbes
For REIT investors—like most American businesses—the last 2 months have been bleak.
Following a very strong 2019, where total returns for all publicly traded REITs rose 28.07%, the industry came tumbling down in January as the effects of Covid isolation set in. According to an end-of-quarter report by REIT industry association NAREIT, REITs as a whole saw losses of 25.4% in the first quarter of 2020, with trends in troubled segments like “regional malls’ posting losses as high as 60.4%. By comparison, the S&P 500 declined by 19.6% during the same period.
While some segments like “self storage” and “infrastructure” (largely cell tower companies) have weathered the economic downturn moderately (-7.69% and -0.69% in Q1 respectively), data centers are the one true positive in the current REIT landscape.
