Fairness REIT returns noticed the steepest decline this yr because the nice monetary disaster, with the FTSE Nareit All Fairness REITs index lowering by 27.46% in worth in 2022.
The index had declined by 41.12% in 2008 and 19.05% in 2007, however had largely posted a rise in worth within the following years. In 2020, the yr of the onset of the COVID-19 pandemic, the index had seen a decline of mere 8.40%.
The actual property sector in whole has seen a tough yr all through 2022, with the Actual Property Choose Sector SPDR ETF declining by 28.68% YTD.
Comparatively, the S&P 500 index declined by 19.44% in 2022.
Workplace REITs, noticeably, misplaced 40.40% of worth in 2022. SL Inexperienced Realty (SLG) particularly has misplaced 56.66% worth YTD, amid declining demand and occupancy of workplace properties and the rising recognition of distant work tradition. The corporate is anticipated to chop its dividend additional in 2023.
One other workplace REIT Douglas Emmett (DEI) declined by 55.09% this yr.
Residential REITs are the following main laggards amongst subsectors, having misplaced 33.28% of worth in 2022.
Specialty REITs, in comparison with different subsectors, have carried out higher this yr, declining by solely 5.71%. Notably, VICI Properties (VICI) noticed a rise of 8.21% in returns, whereas Gaming and Leisure Properties (GLPI) gained 7.52% in worth.
In the meantime, mortgage REIT returns noticed a 35.08% lower amid an rising rate of interest surroundings and deteriorating housing market.
Here’s a have a look at the subsector returns: