In January of this year, we wrote that equity REITs were overvalued on the basis of yield and that they would likely decline by reverting to their mean yield. About then, the REIT market turned down – about 15-16% so far. However, that is not enough to restore fair value. We believe that REITs must surrender another 1/3 to 1/2 of their market price to be fairly valued relative to 10-year Treasury bonds

The chart below shows the abrupt turn in market action for the group in the January-February time frame.