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 specialized REIT winners. First, the backstory, then the results.

The backstory
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 start;, 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 because European debt fears have been 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 Fed's actions to keep interest rates low could hurt future debt refinancings.

The top 10 specialized REITs of 2011
For context, the S&P 500 has returned 2.4% after dividends this year. In other words, the market has been basically flat.


2011 Dividend-Adjusted Return

Price-to-Tangible Book Value

Extra Space Storage (NYSE: EXR) 44.1% 2.3
Public Storage (NYSE: PSA) 37.5% 4.6
Rayonier (NYSE: RYN) 33% 4.0
Sovran Self Storage (NYSE: SSS) 22.3% 1.9
Health Care REIT (NYSE: HCN) 21.4% 1.9
HCP (NYSE: HCP) 19.6% 2.0
LTC Properties (NYSE: LTC) 17.5% 2.2
Universal Health Realty Income Trust 14.4% 3.7
Senior Housing Properties Trust 10.5% 1.5
Ventas 10.1% 1.7

Source: S&P Capital IQ.

There were some pretty solid winners in this group in 2011, well beyond the dividend yields ranging from 2.3% to 6.7%. Nice dividends don't always equate to nice total returns, but they did here. Note that the lowest yielder (Extra Space Storage) was actually the highest returner in this group.

There aren't many bargain basement price-to-tangible book ratios here (other REITs can be found selling near tangible book these days), but just as nice dividends don't necessarily equate to nice total returns, a low price-to-tangible book value doesn't always equate to value. Remember to assess quality as well as cheapness as you look at any stock.

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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.