Market Commentary

For the second quarter of 2021, REITs made up an estimated 9.4% of the total CRE market.

U.S. REITs raised more than $126 billion from IPOs and secondary debt and equity offerings in 2021, a new record for annual capital raising.

Solid macroeconomic fundamentals are good news for commercial real estate and REITs, as a growing economy generates increased demand for leased commercial space.

Robust demand from tenants contributed to declining vacancy rates across most property types, and faster rent growth.

REITs fell sharply in January 2022 as the Omicron variant of the COVID-19 Pandemic persisted and the Federal Reserve indicated its readiness to tighten monetary policy.

The FTSE EPRA/Nareit Global Real Estate Index Series performed strongly in 2021, with the Developed index posting a total return of 27.2%, while the Global index, which includes both Developed and Emerging Markets, returned 23.0%.

The recovery in commercial real estate markets accelerated throughout 2021, especially in the final months of the year.

A close examination of REIT financial exposures suggests that increases in interest rates may have little impact on their operating performance.

At the end of 2020, U.S. public REITs owned an estimated 502,937 properties and 15.1 million acres of timberland across the U.S.

In 2021, REITs outperformed the S&P 500 by 12.6 percentage points with an annual return of 41.3%.

The FTSE Nareit All Equity REITs index performed strongly in 2021, with a total return of 41.3%, while the FTSE Nareit Equity REITs index rose 43.2%.

Throughout the latter part of 2020 and through 2021, new businesses have been forming rapidly, especially in the retail sector.