Despite high interest rates and inflation, performance was strong, according to Nareit.
Occupancy rates of total REIT-owned properties reached and exceeded pre-pandemic levels for the first time in Q2 2022 and funds from operations (FFO) were never higher, according to a report this week from Nareit.
Net acquisitions in the quarter were down, likely from rising interest rates. They totaled $11 billion compared to $16.7 billion in the first quarter.
Nareit Executive Vice President of Research and Investor Outreach John Worth said in prepared remarks that REITs’ performance is holding up in the face of “concerns about a slowing economy” and “stock market volatility.”
Lodging/Resorts Pace FFO Growth
Here’s how FFO performed per sector with nearly 84% of REITs reporting increased FFO from a year ago:
- Lodging/resorts FFO rose 129.8% to $1.3 billion
- Diversified FFO rose 71% to $566 million
- Self Storage FFO rose 14.7% to $1.5 billion
- Data Centers FFO rose 5.8% to $950 million
- Industrial FFO rose 4% to $1.8 billion
Nearly All REITs Increase NOI
The report showed that net operating income (NOI) reached an all-time high of $28.5 billion, which is 3.9% higher than last quarter—and 9.9% higher than one year ago. Ninety-two percent of REITs reported an increased NOI from one year ago.