Real Estate Funds Post 27.6% Gain in 2010

January 7, 2011

The commercial real estate market proved strong in 2010, despite forecasts of its upcoming collapse.

Real estate mutual funds posted a 27.6 percent gain in 2010. The funds capitalized on discounted prices for commercial property, real estate investment trusts, and lucrative dividend yields, the USA Today reports.

"There was less of a distressed environment (for commercial real estate) than many perceived," says David Lee, portfolio manger of the T. Rowe Price Real Estate fund, which brought in a return of 29.9 percent last year, one of the top-performing real estate funds of 2010.

Investors expect 2011 to stay strong as they eye changing dividend yields, shifting real estate demand amid the economic recovery (hotel and apartment REITs were standouts in 2010), and the overall improving health of real estate companies.

Source: “Real Estate Funds Defy Forecasts With 27.6% 2010 Gain,” USA Today (Jan. 6, 2011)