- Overshadowed by concerns about rising inflation, a frenzy of real estate earnings reports over the last month has provided critical information on the state of the real estate industry.
- Results were better than expected across most major property sectors with roughly 80% of the 170 equity REITs and 40 mortgage REITs in our coverage universe beating consensus FFO estimates.
- Positive surprises were primarily in the residential sectors where self-storage, manufactured housing, and sunbelt-focused single-family and multifamily REITs saw accelerating rent growth.
- Across the equity market - and particularly within the REIT sector - two macroeconomic trends have set the course in early 2021: 1) The post-vaccine sector rotation, and 2) Concerns over rising interest rates and inflation.
- Historical trends indicate that REITs, as a whole, have performed quite well during periods of rising interest rates and inflation, and that commercial and residential real estate have historically exhibited moderate-to-strong inflation-hedging properties.
For further details see:
REIT Earnings Recap: Inflation Overshadows Strong Quarter