What happened

After an incredibly volatile and rough week, the stock market had an encouraging reversal on Friday. The Dow Jones Industrial Average and S&P 500 benchmark indices both ended the day about 9% higher. Real estate stocks had similar gains, and telecom real estate investment trust American Tower (AMT -0.48%) was one of the sector's best performers, with a 10% gain on the day.

So what

The real estate sector, which typically holds up well during market downturns, has been hammered just as bad as the rest of the market, if not worse. And in many cases, there are good reasons. For example, hotel REITs and retail REITs rely on people to be willing to travel or to shop in crowded buildings, which simply isn't happening right now.

Communications tower with large field behind it.

Image source: Getty Images.

On the other hand, there are some real estate subsectors that don't have much to worry about from the coronavirus outbreak. Telecommunications REITs are one of them. They provide essential infrastructure, and their income stream isn't likely to be disrupted by global containment efforts. It seems that the market is recognizing that while the recent REIT downturn may have been an overreaction, it was really an overreaction in American Tower's case.

Now what

American Tower was one of the best-performing REITs on Friday because it had been beaten down along with the rest of the real estate sector earlier in the week, but for no good reason. Its business is pretty recession-resistant (communications infrastructure is needed in good times and bad) and isn't likely to suffer any serious headwinds from the outbreak itself, except for perhaps a temporary and mild slowdown in new investments.