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REIT Earnings Recovery Slows to 2% Growth in Q1
After two consecutive quarters of double-digit growth, REIT earnings recovery slowed in the first quarter of 2021, Nareit reported. The Q1 Nareit Total REIT Industry Tracker Series (T-Tracker) report showed funds from operations for all equity REITS rose 2.0% to $14 billion.
“Different parts of the economy are reopening at different speeds, and REIT performance by property sector reflects this variation,” said Calvin Schnure, Nareit senior economist. “The recovery is broadening with the vaccine rollout, however, and prospects for improvement have gone from ‘if’ to ‘when’.”
Q1 REIT earnings performance varied significantly by sector. FFO for REITs propelled by the digital economy, including those in the data center and industrial sectors, hit record highs during the quarter.
Residential REITs rose 5.5% after declining in three of 2020’s quarters. Conversely, office REITs saw negative growth in Q1, while lodging REITs withstood their fourth consecutive quarter of declining FFO.
