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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.

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“Real estate sectors supporting the digital economy maintained their strong performance as demand for technology-based commerce and communications continued to grow even as COVID-19 restrictions lift,” Nareit stated in the report.