Each real estate sector, whether residential, commercial or industrial, carries different levels of risk and reward. With a little research, investing in one (or a combination of) of these sectors can generate excellent returns.
DiversyFund used data from the FTSE Nareit All Equity REITs Index, last updated on June 4, 2021, to compile a list of today’s top 10 performing real estate sectors. Sectors are ranked based on their cumulative total return in 2021, with ties broken by market capitalization as of May 28, 2021. The market capitalization implied in this data set is, according to Nareit, “calculated in outstanding common stock plus operating partnership units, multiplied by the share price.”
REITs, or real estate investment trusts, are attractive options for investors without a lot of cash on hand or for those who don’t want all of their money tied to a single property. One of the main advantages of REITs is the ongoing income potential, even if investors don’t see as much total appreciation. Some REITs are public unlisted or private, but the majority are publicly traded.
Real estate investment trusts finance residential and commercial properties and earn money from sales and rentals. Mortgage REITs, or mREITs, underwrite mortgages and mortgage-backed securities, with the returns accruing from interest on those purchases.
Read on to learn which real estate sectors are performing best, how they weathered the pandemic, and find out projections for each sector’s future performance.