A Defensive Strategy for REIT Investors

But last year, property REITs — companies that own portfolios of commercial real estate like hotels and office buildings, and make up the bulk of the market — posted negative returns of 15.7 percent, on average, according to the National Association of Real Estate Investment Trusts.

Many investors had fled everything related to real estate because of the sagging housing market, though industry analysts attributed the reversal of fortunes for REITs largely to the credit problems that started in the subprime mortgage market. There are worries that these problems could eventually weaken the economy and stifle demand for commercial space.