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REIT Statistics: Everything to Know About REITs in 2020


Aug 12, 2020 by Matt Frankel, CFP

Since their introduction in 1960, real estate investment trusts, or REITs, have become a trillion-dollar part of the U.S. stock market.

It's a quickly growing market. There were only 34 REITs in 1971, but there were more than 100 by 1987. There are now over 200.

Here's our 2020 guide to the most important statistics to know about this exciting type of investment.

Key findings

  • There are 232 public, public non-listed, and private REITs in the Nareit directory.
  • REITs own about $3 trillion in real estate assets.
  • The publicly traded REITs in the U.S. market have a collective market cap of about $1.1 trillion.
  • REITs have outperformed the S&P 500 over the past 20- and 30-year periods.
  • The FTSE Nareit All Equity REITs Index has returned about 1,225% in the past 25 years.
  • The average REIT has a dividend yield of 4.33%.

How many REITs are there?

There are a few different ways to answer that question:

  • About 1,100 REITs have filed tax returns with the IRS.
  • Nareit's directory includes 232 public, public non-listed, and private REITs (the remaining 800 or so that have filed tax returns are likely private REITs not registered with the SEC).
  • 226 of the entries on Nareit's directory are publicly traded.
  • The FTSE Nareit All REITs benchmark index includes 219 REITs listed on the New York Stock Exchange, NASDAQ, and American Stock Exchange.

There are 12 different equity REIT subsectors, plus mortgage REITs. Here's a breakdown of the number of REITs in each subsector, according to Nareit's directory:

Subsector Publicly traded REITs Public, non-listed REITs Private REITs Total REITs in subsector
Data centers 5 1 0 6
Diversified 19 6 0 25
Healthcare 16 3 1 20
Industrial 13 1 2 16
Infrastructure 6 0 0 6
Lodging/resorts 18 0 2 20
Mortgage 19 0 1 20
Office 19 7 1 27
Residential 21 1 4 26
Retail 34 6 2 42
Self-storage 6 0 0 6
Specialty 12 1 1 14
Timberland 4 0 0 4

I'll save you the math. This translates to

  • 192 publicly traded REITs (although there are some that aren't in Nareit's directory),
  • 26 public non-listed REITs (REITs that are open to all investors but don't list their shares on major stock exchanges like the NYSE), and
  • 14 private REITs.

There are REITs headquartered in 33 states plus D.C., but REITs own property in all 50 states.

How big is the REIT market?

REITs own more than 520,000 properties in the United States and about $3 trillion in real estate assets.

$2 trillion of this is owned by publicly traded equity REITs, while the rest is owned by non-listed or private companies.

REIT market capitalization

The total market capitalization of all publicly traded REITs was $1.4 trillion as of January 2020. This includes mortgage REITs, as well.

Due to the COVID-19 pandemic, this had fallen to $1.1 trillion as of May 2020.

Of the $1.1 trillion in REIT market capitalization, $1.048 trillion, or more than 95%, is made up of equity REITs, meaning REITs that own commercial properties.

REITs on the stock market

30 REITs are members of the S&P 500 benchmark index, and REITs account for just under 3% of the S&P 500 index by market cap.

In the small-cap focused Russell 2000 index, REITs make up approximately 8% of the index's weight.

On an average day in May 2020, there was approximately $9 billion in trading volume per day among publicly traded REITs.

Sector REIT statistics

  • REITs own more than 16.7 million acres of timberland in the U.S.
  • REITs own almost 219,000 outdoor advertising properties (mainly billboards).
  • 148,299 single-family rental properties are REIT-owned.
  • Over 95,000 communications towers in the U.S. are owned by REITs.
  • REITs own 24,460 U.S. retail properties.

Average REIT returns

REITs have an impressive track record of strong performance, even when compared with the overall stock market.

The FTSE Nareit All Equity REITs Index has beaten the S&P 500 in 15 of the last 25 full years. Over those 25 years, the annualized total return of that equity REIT index has been 10.9% -- that's a total return of about 1,225% during that time.

For subsector breakdowns, more returns over time, and some standout individual REITs, be sure to check out our data on the historical performance of REITs against the stock market.

Equity REITs versus S&P 500 returns

Time Period Equity REIT Total Returns (Annualized) S&P 500 Total Returns (Annualized) Difference
2020 (15.3%) (5.0%) (10.3%)
1 Year (7.3%) 12.8% (20.1%)
3 Years 3.4% 10.2% (6.9%)
5 Years 5.2% 9.9% (4.7%)
10 years 9.6% 13.2% (3.6%)
20 Years 10.1% 5.9% 4.2%
30 Years 10.4% 9.6% 0.8%
Since 1972 11.3% 10.5% 0.8%

A couple of key takeaways from this chart:

First, real estate has been one of the worst-performing sectors in the S&P 500 during the COVID-19 pandemic due to the disproportionate effects of economic shutdowns on commercial real estate.

Second, notice that REITs have underperformed the S&P over the past 10 years and all periods shorter than that.

The S&P 500 has been in a record-long bull market during that time, and real estate has underperformed. On the other hand, when you look at longer time periods (which include some recessions and bear markets), real estate wins over the past 20, 30, and 48 years.

REIT dividend statistics

The average equity REIT has a 3.97% dividend yield as of June 2020, but this increases to 4.33% if mortgage REITs are included. This is more than double the average 1.83% dividend yield among stocks in the S&P 500.

The average REIT pays out 75% of its funds from operations (FFO) to shareholders as dividends. This ranges from a low of 51.6% for infrastructure REITs to a high of 95.1% for healthcare REITs as of the third quarter of 2019.

How REITs affect the economy

  • REITs contributed an estimated 2.4 million full-time jobs to the U.S. economy in 2018.
  • Mortgage REITs, or mREITs, help finance 2.8 million U.S. homes.
  • REITs are responsible for paying $19.1 billion in annual property taxes.
  • REITs distributed $128.9 billion in dividend income in 2018.
  • REITs invested $60.9 billion in construction and capital expenditures in 2018, the latest year for which data is available.

REITs as retirement investments

87 million Americans own REITs as retirement investments, including those who own REITs directly as well as those who own them through indirect sources like mutual funds and ETFs.

Since there are REITs in almost every major benchmark index (including the S&P 500), most 401k plans own REITs in one way or another.

REITs in the COVID-19 pandemic

Real estate was one of the hardest-hit sectors by the COVID-19 pandemic due to the devastating effects of stay-at-home orders and economic shutdowns on many types of commercial real estate.

However, there has been a dramatic difference between the various REIT subsectors in 2020:

Through the end of May, REIT returns varied from the 19.3% year-to-date gain produced by data centers to the 46.3% negative total return of mortgage REITs. That's a difference of nearly 66 percentage points.

The REIT market is larger than many people realize, with more than 200 different companies in a variety of specializations, and there's a wide range of investment dynamics among the different types of REITs.

REITs can be an excellent way to achieve long-term growth without an excessive risk level, and they can also be great income investments.

Sources

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