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REITs have demonstrated resilient operational performance and are well prepared for the continued economic uncertainty, higher interest rates, and elevated inflation expected in the coming year, says Ed Pierzak, Nareit\\u2019s senior vice president for research.

Speaking on the Nareit REIT Report, Pierzak noted that REITs are not only performing well but are keeping pace with inflation. Meanwhile, balance sheets are in \\u201cgreat shape,\\u201d with leverage ratios near historical lows.

With the risk of recession a dominant theme for 2023, Pierzak pointed out that \\u201ca recession does not have to equate to negative property total returns.\\u201d

A Nareit analysis of the last six U.S recessions shows that on average, REIT's underperformed private real estate in the four quarters before a recession. However, REIT's outperformed private real estate both during a recession and in the four quarters after. A comparison of the FTSE Nareit All Equity Index to the Russell 1000 Index found that it outperformed broader equities before, during, and after recessions.