Has the commercial real estate market fully recovered from pandemic?
According to the report, about two-thirds of all REITs reported higher FFO in Q2 than a year ago. The retail sector’s FFO rose for the fourth straight quarter in Q2, up 21.4% from Q1. By property types, regional malls saw the largest FFO gain, up 32.5% quarter over quarter to $1.4 billion. Free-standing retail FFO ($806 million) and shopping centers FF0 ($1.03 billion) increased 22.4% and 7.9% during the quarter.
Other sectors heavily hit by the pandemic have also experienced earnings recovery. FFO of lodging/resort REITs increased to $67 million in Q2 after four consecutive quarters of negative FFO, while office REITs increased 37.7% to $2 billion, surpassing pre-pandemic highs. Diversified REITs reported a 20.8% increase in FFO, up to $575 million.