The Market Commentary blog on reit.com presents analysis of the macro- and micro-economic fundamentals impacting the REIT and commercial real estate industry. The Nareit economics team offers their commentary on the state of the market, the outlook for commercial real estate and breaking macroeconomic news. The opinions set forth here are solely those of its author(s), and do not necessarily reflect the views of the Nareit or its membership.
Strong Job Market Puts Upward Pressure on Wages
March marked 23 straight months with hires greater than separations and the March JOLTs report showed private job openings are in excess of 10.5 million, the highest level ever recorded.
REITs Outperform in a Tough Month for Equities
Disappointing earnings from the some of the largest companies outside of the REIT space weighed heavily on REITs at the close of the month.
Rising Rates Slow REIT Debt Issuance in First Quarter
U.S. REITs raised $25.4 billion from IPOs and secondary debt and equity offerings in the first quarter of 2022.
REIT Performance Holding Strong Against Record High Inflation
Despite continuing high inflation, REIT returns continue to outpace returns for the S&P 500 on an annualized basis and REIT operating performance growth has exceeded price growth in 2021.
REITs Rebounded in March
March returns total 7.4% for the FTSE Nareit All Equity REITs Index and 6.5% for the FTSE Nareit Equity REITs Index.
REITs Continue to Outperform Private Real Estate
REITs average higher returns over multi-year time horizons compared to private real estate with a broader allocation across innovative property sectors, according to Nareit analysis of past performance.
FTSE Nareit U.S. & FTSE EPRA/Nareit Global Real Estate Index Series Quarterly Review for 2022 Q1
The additions, deletions and classification changes will be applied on Friday, Mar. 18, 2022.
How Rising Interest Rates Have Affected REIT Performance
Historically, REITs have performed well during periods of rising long-term interest rates with average four-quarter return in periods with rising rates of 16.55% compared to 10.68% in non-rising rate periods from the first quarter of 1992 to the fourth quarter of 2021.
Jobs Report Shows Return-to-Office Rebound in February
Over 3.4 million workers who had gone back to telecommuting during January were back in the office in February
How REITs and Private Real Estate Performed Through the Pandemic
REITs have outperformed private real estate property and fund indexes through the fourth quarter of 2021 and have an annual increase of 41.3% in 2021 compared to 22.2% for private real estate.
REIT Earnings Rose 24.6% in 2021
REIT earnings, as measured by funds from operations (FFO), rose 24.6% in the full year 2021 as the recovery from the early stages of the pandemic gained momentum.
Nareit Study Shows the Growth and Benefits of Global REIT Adoption
There are currently 41 countries and regions, accounting for 85% of global GDP with a combined population of nearly 5 billion people, that have enacted REIT legislation.