The US REIT market was down in line with the broader market in 2008 as all sectors of the economy were affected by the credit crisis and global economic struggles, according to the

Washington
DC-based National Association of Real Estate Investment Trusts.

The FTSE NAREIT All REIT Index was down 37 per cent for the year following a near 16 per cent rebound in December. The FTSE NAREIT Equity REIT Index was down 38 per cent for the year after also pulling back 16 per cent in December.

While Home Financing REITs were down 20 per cent for the year, the sector was up more than 14 per cent in the fourth quarter, signaling that the worst expectations of the residential mortgage crisis may already have been discounted in the shares of these companies.

Health Care REITs, down 12 per cent for the year, fared better than most other sectors as investors sought the positive, long-term fundamentals of companies catering to the country’s ageing population.

But the slowdown in global manufacturing and decreased wholesale activity depressed the Industrial REIT sector by 67 per cent for the year.

On the positive side, Self Storage REITs were up 5 per cent in 2008. The relatively small sector is comprised of four companies that operate with very low leverage, a factor investors favoured.

In spite of the fact that some REITs cut dividends in the second half of the year, both the All REIT and Equity REIT indices posted their highest year-end dividend yields in nearly a decade: the FTSE NAREIT All REIT Index dividend yield was 8.37 per cent at
31 December 2008.