Capital that rushed for the exits in the public REIT market in 2022 is poised to flow back into the sector to take advantage of buying opportunities.

Investors have had a tough time finding bright spots in the REIT market over the past year. Every property sector posted negative total returns in 2022, with the FTSE Nareit All Equity REIT Index falling 24.4 percent for the year.

“If you had to summarize 2022 in one word for REITs, it would be divergence,” says John Worth, executive vice president, research and investor outreach, at Nareit. Despite sharply negative total returns, operating performance held up well last year, with 3.9 percent in annual dividends. Notably, REITs logged record earnings of nearly $20 billion in the third quarter, with 80 percent of U.S. REITs posting year-over-year increases in earnings, according to Nareit.

It was a bit of a “perfect storm” for a REIT correction in a year that kicked off with news of Russia invading Ukraine,