Ibrahim & Ong (2008) use operational restrictions of Islamic Investment Guidelines and conduct a thought experiment on Real Estate Investment Trusts (REITs) under restricted and non-restricted schemes. We use financial restriction and reach somewhat different results. Compliant REITs underperform non-compliant REITs in equally-weighted portfolios. However, the results are inversed in value-weighted portfolios. In the latter case, compliant REITs outperform non-compliant REITs and provide a less volatile investment vehicle. More interestingly, during the recent financial crisis, compliant REITs generated higher gains in equally-weighted portfolios and lower losses in value-weighted portfolios. Yet, there is no difference between the restricted and non-restricted portfolios when broader economic factors are included in the research.