Overall, real estate investment trusts are “well positioned’ in an environment of increasing interest rates, according to National Association of Real Estate Investment Trusts Executive Vice President of Research and Investor Outreach John Wort. Data from Nareit T-Tracker results from the third quarter, however, show that healthcare REITs aren’t part of the trend.
REITs overall have seen solid year-over-year increases in funds from operations and net operating income.
Eighty-one percent of REITs reported increases in FFO year-over-year, according to NAREIT. FFO increased to $19.9 billion in the third quarter of 2022, a 14.9% increase from one year ago. Despite overall gains among REITs, however, healthcare REITs’ FFO decreased to $15.6 billion in the third quarter from $16 billion in the same quarter a year ago.
Net operating income across the board was $27.7 billion, an 8.1% increase from a year ago. Here, too, healthcare REITs fell short. Healthcare REITs brought in $22.9 billion last quarter, compared with $23.4 billion during the same period last year.The Fed raised interest rates by three quarters of a point for the fourth time this year, bringing the number to 4%. The Fed has now hiked rates at six straight meetings, something it hasn’t done since 2005, Bankrate reported. The November increase was the sixth consecutive one. This is the highest since early 2008, according to the consumer financial services company.
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