As we approach the end of a tumultuous 2011, it's time to look back at the biggest winners and losers.

So in this series, that's exactly what we're doing, sector by sector. Today, let's take a look at the biggest winners in the office real estate investment trust sector. First, the back story, then the results.

The back story
This year, we saw U.S. Treasuries get downgraded from AAA status while Congress played politics instead of fixing the budget, a domestic economy that has been recovering from its financial crisis in fits and starts, big trouble in Europe, and a Chinese economy that doesn't seem so bulletproof.

The daily volatility in the financial industry has been tremendous, but REITs haven't been swinging around as wildly as banks. Part of that is European debt fears manifesting in bank stock volatility, but the REITs have also been less volatile because of the dividend yields that are a hallmark of the sector. This is because a REIT has to pay out 90% of its taxable income in order to keep its favorable tax status.

Another thing to keep in mind with REITs is that most are heavily leveraged. As a result, any change in the Federal Reserve's actions to keep interest rates low could hurt future debt refinancings.

The best office REIT stocks of 2011
For context, the S&P 500 has returned 1.3% after dividends this year. In other words, the market has been basically flat.


2011 Dividend-Adjusted Return

Price-to-Tangible Book Value

CoreSite Realty (NYSE: COR) 37.3% 2.6
Digital Realty Trust (NYSE: DLR) 36.1% 4.2
Boston Properties (NYSE: BXP) 17.5% 3.0
Douglas Emmett (NYSE: DEI) 12.4% 1.3
Kilroy Realty (NYSE: KRC) 6.9% 2.0
BioMed Realty Trust (NYSE: BMR) 1.7% 1.2
Duke Realty (NYSE: DRE) 1.1% 1.6

Source: S&P Capital IQ.

One thing to note is that only the top six office REITs have beaten the market this year. This is with current dividend yields in the 2.2%-5.6% range. In fact, the highest current yielder here, Duke Realty (5.6%) is the only one that lagged the market. So as you look at this list for investing ideas, remember that big dividends don't guarantee big returns.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.