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Daily Real Estate News  |  December 30, 2010  |   REITs Outrun the Stock Market Again
Real estate stocks are poised to end the year with gains that are double the broader stock market, the second consecutive year that REITs outperformed the major stock indexes.

As measured by the Dow Jones All REIT index, REITs rose 27 percent as of yesterday's close.

While that is a smaller gain than in 2009, when REITs registered gains of 28.5 percent, this past year's figures handily topped the Dow Jones Industrial Averages and Standard & Poor's 500 index.

According to analysts, the REIT rally was triggered by investors hunting for higher dividend yields. REIT dividend yields are presently around 4 percent versus 3.35 percent on Treasury bonds.

Brad Case, vice president of research and industry information for the National Association of Real Estate Investment Trusts, remarks, "The REIT yields are very attractive compared to anything else in the market."

Since the first of the year, dozens of REITs have hiked their quarterly dividends -- an about-face from last year when many REITs were cutting or suspending dividends. Other investors were purchasing real-estate stocks based on economic fundamentals based on a widely held belief that commercial building owners will report healthier earnings from rising rents and occupancy rates next year.

Source: Wall Street Journal, A.D. Pruitt (12/29/10)

© Copyright 2010 Information Inc.

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