REITs drop 5% in December, decline by nearly one-quarter in 2022

REITs dropped 5.1 percent in December, according to the FTSE Nareit Equity REIT Index, and fell 24.4 percent in the past year. The declines come amid a broader equity market collapse. The S&P 500 Index was down more than 18 percent in 2022, and the tech-heavy Nasdaq Composite Index fell 32.5 percent in the past year.

REITs have been challenged in 2022, given an environment with both a declining equity market and rising interest rates.

The biggest decline in December was among lodging and resort REITs, which fell more than 11.7 percent. In the past 12 months, hotel REITs are down 15.3 percent.

The best-performing property type in December was freestanding retail, which saw a slight gain of 0.2 percent. Freestanding retail, also known as single-tenant retail, is among the best-performing property types in the past year, down 6.5 percent in 2022. Realty Income Corp., the largest freestanding retail REIT by equity market capitalization, recently agreed to acquir