Publicly traded real estate investment trusts underperformed compared to broader equity markets in the third quarter, according to analytics firm Barclays Capital. However, the forecast is not all doom and gloom. REITs invest in real estate holdings and mortgage-backed securities. REIT performance for each sector is as follows: technology -12.8%; regional malls -14.2%; shopping centers -15.6%; office -21.0%; industrial -28.8%; and brokers -45.9%. Even the multifamily space, which is seeing a renewed interest with rising rentals, fell 11.5%. The NAREIT Equity Index fell 15.1% on a total return basis versus the S&P 500, which posted a quarterly 13.8% drop. Year-to-date, the NAREIT Equity Index is down 6.1% on a total return basis, outperforming the S&P, which is down 8.5% over the same period. "Looking forward, the increased economic uncertainty is likely to contribute to continued volatility for both the broader markets and REITs in the near term," BarCap analysts said. "We will look for a more cautious tone in management commentary as we head into 3Q earnings." The analysts are not expecting recession-like conditions to return in the commercial real estate markets, they add. Furthermore, REIT balance sheets are in a stronger position than in years' past. They also predicted GDP growth to accelerate into year-end, increasing from the 3Q11 estimate of 2% to 2.5% in 4Q11. "Despite current economic headwinds, real estate fundamentals remain relatively solid," they write, "although the pace of recovery and improvement continues to vary by geography and property type." Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.