WASHINGTON, DC-REITs closed out 2011 on a high note—a very high note—having raised a record level of capital and roundly beating the S&P 500. NAREIT is releasing figures today that will show that REITs raised $51.3 billion in debt and equity in 2011. Equity REITs, with an annual return of 8.2%, quadrupled S&P’s performance of 2.1%, Brad Case, NAREIT’s senior vice president for research and industry information, tells GlobeSt.com. “It was a great quarter and a great year for REITs,” he says.

Indeed, REITs’ performance last year toppled a few records. REITs raised $37.5 billion in equity, beating 1997’s record of $32.7 billion. The prior record year for capital raised overall was in 2006, with $49 billion, according to Case.

REITs also made up for lost ground in Q4, with total returns of 8.3%. Of that, the share price return was 4.3%, Case says, with the remainder the dividend component. “And that is one of the key differences between REITs and the broader market—dividend performance,” he adds. 

In a way it is surprising how well REITs performed, given the headwinds they faced. While REITs benefited from a combination of better operating performance and better pricing on core assets, they were also affected by the fallout from the US and European debt crises, Case says.

“That story will persist into this year, but in 2012 I think there will be more of an emphasis on the positive—the improving economy, the improving fundamentals—and less on the negative,” Case says. “We are already seeing the US economy move forward.”