"Well over half the total REIT return for the year was dividend income," Case said. "In fact, it has been very remarkable to see how strongly income produced by U.S. REITs has held up even at the weakest part of the commercial real estate market cycle."
Another impressive note from 2011 was the fact that U.S. listed REITs raised a record amount of capital during the year.
Case said all of the capital raised positions listed REITs very strongly in 2012 and beyond. Of the total $51.3 billion raised in 2011, $35.2 billion was secondary equity, $13.8 billion was unsecured debt and $2.3 billion came from IPOs.
"If you look at the two factors likely to drive earnings growth for REITs going forward, one of them is the improvement in operating fundamentals. The other is the fact that REITs have a strong ability to acquire properties at good prices because of their access to capital markets," Case said. He added that in addition to acquiring assets in 2011, REITs also used the capital raised to strengthen their balance sheets so they will be in an ideal position to acquire properties going forward.
Case said he expects the acquisition of properties to be a major theme in 2012 as the loans taken out in 2007 among non-REIT investment managers mature and those owners are unable to refinance and put the properties on the market.
Strong operating fundamentals were a key to the strong growth posted by the apartment REIT sector in 2011 (up 15.4 percent for the year). Case said he sees a number of positive signs for operating fundamentals improving across many sectors of the commercial real estate space. Occupancy levels and rent growth, for example, improved in most property sectors in 2011, he said.
"In the broader economy, we have a whole array of signs," he said. "We have seen steady growth in private sector employment, consumer retail spending and consumer confidence."
Case added that these signs don't point to a quick economic recovery, but that the economy is going to steadily improve and that will improve operating fundamentals in commercial real estate.