Equity REITs Outperform S&P 500

Equity real estate investment trusts outperformed the Standard & Poor's 500 index in 2002 with a total return of 4.0%, compared with a total return decline of 22.2% for the S&P 500, according to SNL Financial, Charlottesville, Va.However, the REIT sector's positive performance is largely due to the dividend effect. On a "price-only basis," equity REITs were actually down 2.8% for the year, the data firm said. But even then, compared with the S&P 500's 23.4% decline when only price appreciation is considered, REITs turned in a better performance for 2002. Retail REITs, with a 21.1% total return, turned in the best performance for the year. Multifamily REITs, on the other hand, were down 5.8% on a total-return basis, even after considering an aggregate dividend yield of 7.7%, SNL said. Office REITs were also in the red, with a negative total return of 4.2% for the year. Paul Reeder, director of real estate at SNL Financial, said this is the third year in a row that REITs have outperformed the "broad markets."