Jan. 07, 2023 6:42 AM ETiShares Mortgage Real Estate Capped ETF (REM), VNQ, IYR, XHB, REZ, ROOF, GMRE, HOMZ, NETL, USRT, REET, SCHH, DRNO, XLRE, VICIBy: Mary Christine Joy, SA News Editor May Lim/iStock via Getty Images The window for U.S. equity real estate investment trusts capital offerings slammed shut in 2022, and experts are unwilling to bet on a swift reopening.
There were just 101 offerings in 2022 that raised $41.52B in 2022. Following record-breaking offerings in 2021, where the company raised $133.59B, the 2022 market cooled in a big way. The majority of capital raised in 2022 came through common equity offerings at $28.66B, while senior debt offerings accounted for the remaining $12.86B, according to the latest report from the National Association of Realtors.
Casino REIT VICI Properties (VICI) attracted the most capital year-to-date through several senior debt and common stock offerings totaling $8.73B, followed by Realty Income (O) at $3.76B. Equity REIT returns saw the steepest decline last year since the great financial crisis, with the Real Estate sector falling 28.45%, while underlying Real Estate Select Sector SPDR ETF (XLRE) fell 28.72% against broader S&P 500 index decline of 19.4%. The real estate sector in entire has seen a rough year throughout 2022 as inflation and interest rate hikes weighed on sector.
REITs were under pressure after the fastest series of interest-rate hikes in recent history and expect uncertainty to continue through at least half of 2023.