Diversified REITs

Diversified REITs own and operate a mix of different properties. For example, a diversified REIT might own industrial, retail and health care properties.

Diversified REITs offer a great way to invest in multiple types of real estate at once. Diversified REITs also mitigate the risks associated with specific property types, as the REIT still has the potential to perform well even when one of its property types isn’t producing much income. The potential pitfalls of diversified REITs varies by individual REIT, and depends on the properties in a given REIT’s portfolio.

The coronavirus pandemic has been highly impactful for the diversified REIT subsector. Diversified REITs have seen double-digit negative returns throughout the majority of the pandemic.

Some examples of diversified REITs are W. P. Carey Inc (NYSE: WPC), VEREIT, Inc. (NYSE: VER) and Vornado Realty Trust (NYSE: VNO).