The 31.6 percent one-year compound annual total return for the NAREIT Equity REIT Index was its strongest performance since 1976, when the compound annual total return was 47.6 percent. In individual property sectors, retail posted the highest total return at 33.2 percent in 2004, followed by strip centers (29.6 percent) and lodging (28.4 percent).

Additionally, the results for REITs are just as strong over longer periods. The NAREIT Equity REIT Index outperformed the S&P 500 and Dow Jones Industrial Average over the one-year, five-year, 10-year and 30-year periods (as shown in the table above).

Equaling the impressive performance of the equity index, the NAREIT Mortgage REIT Index has outperformed the Dow Jones and S&P 500 over the one-year, five-year and 10-year periods. The one-year return for the mortgage index was 18.4 percent. The five-year return was 38.1 percent, and the 10-year return was 19.8 percent. The NAREIT Mortgage REIT Index posted a 30-year compound annual total return of 12.1 percent, which bested the 11 percent return of the Dow Jones.