The Wall Street Journal recently noted that the FTSE Nareit All REITs index has outperformed the broader stock market in 2021. Total returns including dividends totaled 26.05% through July 31, compared to 17.99% for the S&P 500 index.

The stock market peaked on February 19, 2020. REITs had shown a mixed set of results, and performance differed by asset class, as reported in our previous posts on REIT pricing. So while REITs have been on a general tear in 2021, they still have a ways to go to match the performance of the overall stock market benchmarks since that pre-pandemic peak.

Since February of 2020, the NASDAQ has grown more than 50% (as of August 11), and the S&P 500 more than 31%. No single real estate asset class has posted better results. However, CRE service firms have tracked ahead of the S&P 500, and slightly below the NASDAQ, with 47% gains in that same period.

Within sectors, data centers have been the best performing, up nearly 23% from February 2020 levels. Industrial follows at second with 20% gains, and life science/healthcare third at 8%. The last is a mixed bag, as one REIT is pure life science (Alexandria is up nearly 22% overall), while operators such as Healthpeak and Welltower, which own seniors housing, are still below the pre-pandemic benchmark.

Residential is still off, by about 2%, while retail is still around 4% below February 2020; for example, KIMCO is up 20%, while Simon is 2.5% lower. The laggard is office, which is still down 19%. Prices are up from year-end 2020 levels but are still a ways from their pre-pandemic heights. Compare this to recent stats from Real Capital Analytics showing office transaction pricing growth. This disconnect bears watching.