Market Commentary

The FTSE Nareit All Equity REITs Index ended a tumultuous March down 1.7% for the month, and the FTSE EPRA Nareit Global Extended Index declined 2.3%.

Recent research by Nareit shows that REIT returns have tended to bounce back—and even surge—after significant public and private real estate market divergences.

One of the dominant themes among institutional real estate investors of the past few years has been the shift toward “alternative” property types.

The industrial, retail, and apartment property types have maintained occupancy and four-quarter rent growth rates akin to or higher than their respective pre-pandemic levels.

Many employers are eager for pre-pandemic, in-office operations to resume, but many workers remain reluctant to return.

On a year-to-date basis, the FTSE Nareit All Equity REITs Index is up 3.5% and the FTSE Nareit Equity REITs Index is up 5.4%.

In the third quarter of 2022, the FTSE Nareit All Equity Index and NCREIF Fund Index–Open End Diversified Core Equity posted rolling four-quarter total returns of -16.3% and 22.1%, respectively.

The U.S. economy has been marked by mixed economic growth results, elevated inflation, and higher interest rates.

New research shows that REITs target high performing operators for investment and that skilled nursing operators increase staffing after becoming REIT tenants.

All property sectors were positive in January, led by lodging/resorts at 17.1%, industrial at 13.7%, and data centers at 13.2%.

The U.S. commercial real estate market is amid an uncoupling. Property operational performance has generally been strong for both public and private real estate, but valuation metrics and total returns have diverged.

U.S. REITs raised $2.5 billion from secondary debt and equity offerings in the fourth quarter of 2022, down from $8.6 billion raised in Q3.