- Earlier this year, we published a report titled "Cheap REITs Stay Cheap" that analyzed the "factors" that exhibited persistent outperformance in the REIT sector over the past several decades.
- Key takeaways from this report included the observation that higher-yielding, higher-leveraged, and "inexpensive" REITs tended to produce inferior total returns over most measurement periods.
- These "factors" were on full display at extreme levels in 2020 amid the coronavirus pandemic. We revisit and analyze the performance trends within the REIT sector.
- REITs in the highest quadrant of dividend yields entering 2020 plunged more than 30% and saw the vast majority of dividend cuts. REITs in the lowest dividend yield quadrant produced positive total returns.
- Despite the pullback in 2020, REITs have been one of the best-performing asset classes since the start of 2010. Investors willing to "pay up" for quality REITs should continue to be rewarded while "yield chasers" will likely be punished.
For further details see:
Cheap REITs Stay Cheap