REITs’ Quarterly FFO Hits Record High

NAREIT’s Wechsler says occupancies in Q2 were just below the record levels achieved in the second half of 2016.

WASHINGTON, DC—Quarterly funds from operations for equity REITs exceeded $15 billion for the second quarter, marking the first time FFO reached this milestone, NAREIT said Tuesday. FFO for Q2 was up 7.9% from Q1 and 7.3% from the year-ago period, according to NAREIT’s T-Tracker, a quarterly composite performance measure of US listed REITs. The new milestone occurs just three years after quarterly FFO broke the $10-billion barrier.

“This quarter’s T-Tracker results show a healthy REIT industry, with near-record occupancy rates,” says Steve A. Wechsler, NAREIT’s president and CEO. Q2 occupancy rates across the REIT spectrum came in a 93.4$, just below the record of 93.7% in Q3 and Q4 of last year, with retail REITs exceeding the average at 95.2% occupancy. Wechsler adds that the growth in REIT FFO was driven by “a combination of new REITs entering the market, asset acquisitions, and organic growth of properties held by existing REITs.”