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.
Commercial Real Estate Performance Remained Strong in the First Quarter of 2022
Commercial real estate fundamentals continue to point to strong performance in the retail, multifamily, and industrial sectors.
REIT Operating Performance Remains Strong Against High Inflation
The Bureau of Labor Statistics released the April 2022 Consumer Price Index data showing a much smaller monthly increase in prices in April than in March.
Global Real Estate Outperforms Broader Market During a Turbulent Month
The FTSE EPRA/Nareit Global Real Estate Index Series outperformed broader markets in April.
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