The initial quarterly results from real-estatetrusts have been decent so far this earnings season, but REIT stocks are still languishing in negative territory, in danger of trailing the broad market after seven straight years of outperformance.
Aside from the latest batch ofresults, REIT-oriented investors will be keeping a close eye on the Federal Reserve's looking decision on interest rates. The volatile REIT sector got a lift in mid-September, when the Fed cut rates by a surprisingly large half a percentage point, but has traded lower through much of October.
Still, the commercial real-estate market has held up relatively better than the residential side, which has been further weakened by exposure to the subprime-mortgage mess.
Through Monday's close, the Dow Jones Wilshire REIT ETF (RWR) , an exchange- traded fund tracking the REIT sector, was off 6.5% for the year to date, trailing the S&P 500 Index (SPX) by more than 16 percentage points, according to Morningstar Inc..