S&P 500 Debuts REIT Group

September 1, 2016
The first quarter of this year was something of a dud for commercial and multifamily originations, according to new data from the Mortgage Bankers Association (MBA)

Beginning today, real estate investment trusts (REITs) will be publicly traded as their own S&P 500 Index group.

According to a Finance & Commerce report, the new REIT group marks the first change to the S&P configurations in almost two decades. This change is a tribute to the viability of the 28 REITs within the S&P 500, which grew 360 percent within the S&P since March 2009—in comparison, the broader index gained 221 percent during the same period. The REITs total more than $580 billion in market value.

Absent from this new group, however, will be mortgage REITs (mREITS), which will remain under the S&P financial sector grouping. But even without mREITs in the mix, Howard Silverblatt, a senior index analyst at S&P, believes the new set-up is long overdue.

“The overall change, it’s an editorial comment to some degree,” he said. “It is a significant change in the culture of investing.”