Investing in REITs: Real Estate Investment Trusts, 4th Edition

The 1990s: The Modern REIT Era—Plus More Growing Pains

Emerging from the 1980s' real estate excesses, REITs did not begin the 1990s well. REIT shareholders suffered through a bear market in 1990 that cut their share prices down to bargain levels not seen since the 1970s. NAREIT statistics show that equity REITs' total return for 1990 was a negative 14.8 percent, making that the worst year since 1974. This was quite a shock to REIT investors, who had perhaps become overconfident; from 1975 until 1990, equity REITs had experienced only one year of negative total return—1987—when the figures were in the red by a scant 3.6 percent.

Figure 6.3 Total ...