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Research - JANUARY 5, 2022

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REITs surge in December to finish year on high note

by Loretta Clodfelter

U.S. equity REITs put in a stunning finish in December to a strong year. The Nareit Equity REITs Index reported a total return of 8.8 percent in December and 43.2 percent for the full year. By comparison, the S&P 500 Index rose 4.5 percent in December and 28.7 percent in 2021.

The strongest performer in December was self-storage REITs (up 13.8 percent). The sector was also the second-best property type on a year-to-date basis (79.4 percent) and in the fourth quarter (29.0 percent). According to the December 2021 National Self-Storage Report from Yardi Matrix, “occupancy levels are at or near long-term highs, as demand is robust for short- and long-term rentals.”

On a full-year basis, the highest total returns came from regional malls (up 92.1 percent), and the best performer in the fourth quarter was the industrial sector (up 32.9 percent). The strong performance of regional mall REITs in 2021 was part of a reopening trade, as sectors that had been esp

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