Apartment REITs have systematically outperformed over time, and by a huge margin. This article will examine the structural and extraneous reasons behind the outperformance and determine if the opportunity still exists today.
We find that the primary factors contributing to multifamily outperformance were the following:
- Clean industry structure
- Location and time specificity
- Shadow supply reduction
Let us begin with a long-term snapshot of apartment REIT performance.
Source: SNL Financial
Apartment REITs have realized a total return of 2743% since 1992 compared to 1438% for the REIT index. Note that over this time frame REITs significantly