Real estate was the second-worst-performing sector after technology in 2022, primarily because of multiple rate hikes. The Federal Reserve raised the benchmark federal funds rate seven times last year to the highest level in 15 years to mitigate inflationary pressures. The S&P United States REIT index plunged 27% in 2022.
Though the majority of publicly-traded real estate investment trusts (REITs) have been recovering over the past two months, the Federal Reserve’s hawkish stance combined with the macroeconomic uncertainties raise questions regarding their latest upswing.
These three real estate investment trusts (REITs) hit new 52-week lows this week, demonstrating how the uncertainty about interest rates continues to plague the sector. Hudson Pacific Properties Inc. (NYSE: HPP), Kilroy Realty Corp.