Real estate investment trusts and related exchange traded funds have weakened in response to rising rate concerns. However, fundamentals may still support the market.

Over the past three months, the Vanguard REIT ETF (NYSEArca: VNQ) fell 8.9%, SPDR Dow Jones REIT ETF (NYSEArca: RWR) decreased 8.4% and iShares Dow Jones US Real Estate Index Fund (NYSEArca: IYR) declined 7.9%.

Citigroup’s Michael Bilerman argues that after the sell-off, REITs have become increasingly attractive to net asset values, bonds and broad equities, reports Teresa Rivas for Barron’s.

Specifically, Citigroup analysts point out that healthcare REITs look better after the upward movement in interest rates weighed on recent performance. The sub-sector is especially sensitive to change sin rates because of its elevated external growth expectations and spread investing.

Hotels and lodging-related REITs also have solid fundamentals that remain intact, with improving demand, and will support the group through the second half of the year, Citi said.

Office REITs were weak over the second quarter, but Citi argues that the group could present opportunities for outperformance.