I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.
“Unprecedented” has become the new normal for the global economy, and 2022 was no exception.
As investors continue to unravel the tangles of 2022, you may be asking yourself “what can REIT statistics tell us about 2023?”
While 2022 had significant challenges, the experts are saying that 2023 will be a good year, and these top real estate investment trust statistics can help explain why.
Top REIT Statistics
REIT Market Stats
In 1990, the total REIT market cap was $10 billion. In 32 short years, that number has grown to $2.5 trillion, a 250x increase. (Nareit)
In 32 short years, that number has grown to $2.5 trillion
REIT has enjoyed incredible growth year-over-year since 2009.
With $229 billion of revenue in the United States, North America is still the #1 market for REITs. While North America holds the majority of REITs, the most significant growth has happened in Asia, growing from 31 REITs in 2005 to 216 REITs in 2021.
REITs have grown significantly as a portion of global GDP, increasing from 28% of global GDP to 85% in just 30 years.
As a reflection of this incredible growth, 154 million Americans are invested in REITs today, controlling $4.5 trillion in real estate.
Looking towards the future
In the big picture, REITs are in the middle of a meteoric rise. In the small picture, 2022 was a difficult year for REITs with most sectors reporting a negative return in the first two quarters of the year.
By the end of the year, however, the tides began to turn, and experts now concur that REITs will continue to grow in 2023, but at a slower pace than in previous years.
In the long term, experts expect the global real estate market to reach $30 trillion by 2031, making REITs one of the most consistently profitable investments today.
Experts expect the global real estate market to reach $30 trillion by 2031
64% of the top 25 North American investors as well as 64% of the top 25 global investors say they plan to increasingly use REITs in 2023.
Market health
Before the FTSE Nareit Hybrid REITs Index was discontinued in 2020, the United States REIT industry had reached a total market cap of $1.2 trillion.
Today, the top 3 best value REITs are:
- Annaly Capital Management Inc. (NLY) with a $9.7 billion market cap and 2.6 P/E.
- Rithm Capital Corp. (RITM) with a $4.2 billion market cap and 4.5 P/E.
- Apartment Income REIT Corp. (AIRC) with a $5.5 billion market cap and 6.1 P/E.
The fastest growing REIT today is:
- Public Storage (PSA) with a $52.6 billion market cap and an incredible 21.6% revenue growth.
In 13 key sectors (Office, Industrial, Retail, Lodging/Resorts, Residential, Timberlands, Healthcare, Self-Storage, Infrastructure, Data Centers, Diversified, Specialty, and Mortgage/mREIT), the overall market caps by sector are:
| Sector | Market Cap |
|---|---|
| Specialty | $328 billion |
| Infrastructure | $195 billion |
| Residential | $190 billion |
| Self-Storage | $151 billion |
| Industrial | $136 billion |
| Retail | $125 billion |
| Data Centers | $118 billion |
| Office | $99.8 billion |
| Diversified | $88 billion |
| Mortgage | $67 billion |
| Lodging/Resorts | $46 billion |
| Timberland | $40 billion |
| Healthcare | $6 billion |
Amount of REIT Stats
Globally, REITs have exploded in popularity in the last 30 years, going from 120 REITs in 4 countries in 1993 to 865 REITs in 40 countries going into 2023.
In the last 30 years, REITs have grown from 120 REITs in 4 countries in 1993 to 865 REITs in 40 countries going into 2023
Of those REITs, the United States remains the volume leader with 217 REITs or just over 25% of the global total.
Asia and Europe are close behind the United States in the number of REITs. South American and Pacific countries are nearly tied for a distant fourth and fifth place, with Africa and the Middle East trailing behind.
Number of U.S. REITs by sector
Of the 179 U.S. REITs tracked by Nareit Retail is by far the largest sector with 33 REITs compared to 31 Mortgage REITs (mREITs) and 20 Residential REITs.
Here is the complete breakdown of REIT volume by sector:
| Sector | Volume |
|---|---|
| Retail | 33 |
| Mortgage | 31 |
| Residential | 20 |
| Office | 20 |
| Healthcare | 15 |
| Lodging/Resorts | 14 |
| Diversified | 12 |
| Industrial | 11 |
| Specialty | 9 |
| Self-Storage | 5 |
| Infrastructure | 4 |
| Timberland | 3 |
| Data Centers | 2 |
REIT Return Stats
One of the reasons REITs are such a popular force in the global economy is that they have a very high average return.
While 2022 was a challenging year, REITs have averaged a 12.6% annual return over the last 25 years and experts expect that growth to continue into 2023.
REITs have averaged a 12.6% annual return over the last 25 years
Equity REIT vs. S&P 500
Since REITs are investment powerhouses, it’s no surprise that 6% of the S&P 500 is comprised of REITs. While those 30 S&P 500 REITs are represented in both sets of data, there’s a clear difference between the performance of the S&P 500 and equity REITs over time.
Over the last 25 years, REITs have outperformed the S&P 500. While the S&P 500 boasted an 11.9% annual return, REITs averaged 12.6%, a 0.7% difference.
Over the last 25 years, REITs have outperformed the S&P 500.
However, on a shorter scale, the S&P has outperformed REITs. In the last 5 years, the S&P 500 enjoyed a 12.5% annual return compared to REIT’s 9%, a difference of 3.5%.
REIT Dividend Statistics
Because the IRS requires REITs to pay out 90% or more of their taxable profit in the form of dividends, they are attractive opportunities for some investors.
While stock performance lagged in 2022, operating performance continues to be lucrative.
In August 2022, REIT dividends were 3.4% or about double the yield of the S&P 500. What is striking about this trend is that double the S&P 500 is unusually low for REITs as they typically average about +5% over S&P Dividends.
In 2021, REITs had a 5.58% yield. While that number dropped to a 4.05% dividend yield in 2022, experts anticipate that REITs will continue to outperform the S&P 500 in 2023.
REIT Dividend Statistics by Sector
While year-to-date trends show a bleak picture of 2022, the most dramatic losses happened in Q2, with most sectors turning positive in the last months of the year.
October 2022 was only the third month in 2022 to see positive returns, but an +8.69% total return in October is a good sign for investors.
As of Q3 2022, these are the total year-to-date returns and dividends from each REIT sector:
| Sector | 2022 Returns |
|---|---|
| Specialty | -1.3% |
| Lodging/Resorts | -7.8% |
| Diversified | -10.2% |
| Self-Storage | -10.8% |
| Healthcate | -12% |
| Office | -12% |
| Timberland | -13.3% |
| Infrastructure | -14.5% |
| Mortgage | -14.8% |
| Retail | -17% |
| All Equity | -17.4% |
| Residential | -20.8% |
| Industrial | -22.8% |
| Data Centers | -23.2% |
Stock performance is down since highs in 2019, but operating performance is consistently rising.
Despite this significant drop in total returns and dividends, REITs have simultaneously seen a 15.4% increase in Funds From Operations (FFO) in the last 4 quarters.
REIT Economic Stats
REITs are major economic drivers, contributing 3.2 million jobs and $229 billion to the U.S. economy.
REITs are major economic drivers, contributing 3.2 million jobs and $229 billion to the U.S. economy.
In total, Americans own $4.5 trillion in real estate through REITs. REITs represent about 27% of the United States GDP and 85% of the global GDP.
REITs represent about 27% of the United States GDP and 85% of the global GDP.
Top 20 Largest REITs
Going into 2023, these are the 20 largest REITs globally:
| REIT | Market Cap |
|---|---|
| Prologis | $109 billion |
| American Tower | $102 billion |
| Equinox | $64 billion |
| Crown Castle | $60 billion |
| Public Storage | $53 billion |
| Simon Property Group | $44 billion |
| Realty Income | $41 billion |
| SBA Communications | $31 billion |
| Digital Realty | $31 billion |
| Goodman Group | $23 billion |
| Vonovia | $20 billion |
| Mid-America Apartment Communities | $19 billion |
| Sun Communities | $18 billion |
| Link REIT | $15 billion |
| Gaming and Leisure Properties | $14 billion |
| Kimco Realty | $13 billion |
| Equity Lifestyle Properties | $13 billion |
| SEGRO | $12 billion |
| CapitaLand Mall Trust | $10 billion |
| National Rental Properties | $8 billion |
Debt Ratio of 20 Largest REITs
Ranked by market cap, these are the debt ratios of the 20 largest REITs globally:
| REIT | Debt Ratio |
|---|---|
| Prologis | .46 |
| American Tower | 2.87 |
| Equinox | 1.131 |
| Crown Castle | 2.798 |
| Public Storage | 0.6722 |
| Simon Property Group | 7.17 |
| Realty Income | 0.61 |
| SBA Communications | -2.304 |
| Digital Realty | 0.9325 |
| Goodman Group | 0.1724 |
| Vonovia | 1.83 |
| Mid-America Apartment Communities | 0.73 |
| Sun Communities | 1.03 |
| Link REIT | 0.34 |
| Gaming and Leisure Properties | 1.698 |
| Kimco Realty | 0.7431 |
| Equity Lifestyle Properties | 0.39 |
| SEGRO | 0.2107 |
| CapitaLand Mall Trust | 0.6888 |
| National Rental Properties | 0.95 |
Conclusion
While the United States remains both the volume and market cap leader in REIT, Asia is making significant strides to catch up.
2022 was a difficult year for REITs that ended on a positive note. Despite overall losses, the final quarter of 2022 revealed a return to form for REITs – a trend that experts expect to continue through 2023.
Despite the uncertainty surrounding REITs in 2022, the future is bright for investors as experts anticipate continued – though slowed — growth in 2023.
I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.
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