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The recovery in commercial real estate markets is proceeding unevenly across the various property types through the second quarter of 2021

The yield spread to Treasuries as of the end of 2016 was in the bullish part of its historic range—and if a wide variety of estimates of the past relationship between spreads and forward-looking returns continues to hold, that currently bullish spread would suggest relatively bullish future total returns for investors in exchange-traded Equity REITs.

Current REIT fundamentals and equity market conditions suggest that investing in REITs will likely continue to have such benefits in the period ahead.

The FTSE Nareit All Equity REITs Index rose 3.2% in September, continuing to outperform the broader stock market as the Dow Jones U.S. Total Stock Market and Russell 1000 each rose 2.1%.

Fifty-four listed equity REITs responded between April 8 and April 15, representing most property sectors and almost $418 billion in equity market capitalization or 44% of the FTSE Nareit All Equity REIT equity market capitalization.

The outlook for REITs and commercial real estate remains favorable, despite some mixed macroeconomic news in the early months of this year.

While valuations are somewhat different across different segments of the REIT industry, there is a “wealth of undervaluation” in REITs today—and investors certainly should be paying closer attention.

REITs have also prepared themselves for economic uncertainty by building up their stock of cash and cash-like assets and maintaining substantial unused lines of credit.

The last 12 months have seen high levels of volatility and sharp swings in sentiment.

The high level of jobless claims week after week raised fears that new rounds of layoffs may be spreading from the sectors initially hit by the crisis to the rest of the economy, and perhaps warning of greater damage from the shutdowns.

Many analysts have noted that increasing construction and high prices on commercial properties often presage a downturn in the sector, and have asked whether this cycle may be approaching the 9th inning. NAREIT research economists have examined data from several sources to shed further light on the risks that the sector may be approaching a correction.

Nearly every recent housing market indicator has shown significant increases for July, and were above consensus expectations.

REITs were first deemed eligible for inclusion in the S&P 500 in October 2001.

REITs rose last week with a 2.5% total return on the FTSE Nareit All Equity REITs Index, the fourth consecutive weekly gain.

In 2021 REIT capital market activity has been highlighted by the announcement of eleven REIT mergers.

How to construct an inflation-protecting portfolio without exposing yourself to the risk of guessing wrong about an increase the inflation rate.