ThinkAdvisor notes the success of Specialty REITs, which own properties as diverse as farmland, document storage and outdoor ad space. Trepp Inc., an information provider for real estate and banking, notes that REITs in this category have posted a 31.44% total return year to date, and a 5.45% dividend yield, the latter representing the strongest among equity REITs.

The article indicates that Specialty REITs benefit more from factors that affect specific businesses than from traditional supply and demand fundamentals of the real estate market. Growth of the economy and population fuel demand for everything from entertainment to prisons. Within the specialty REIT sector, some businesses are performing better than others, but on the whole, specialty REITs are posting hefty dividend yields and most have reported robust price appreciation this year.

Two sectors within the specialty REIT category have been strong performers YTD in spite of regulatory concerns, prisons and outdoor advertising.  Billboard REITs Lamar Advertising and Outfront Media are up 10% to 12% year to date and both beat the S&P 500 (up 8% year to date) and Q1 earnings estimates. On the other hand, the article notes, regulations that limit new billboards make existing signs more valuable, but stricter industry regulation and the movement to ban outdoor advertising are concerns.

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