REITs beating the market

Real estate investment trusts were not supposed to be the bright spot this year. Rate-sensitive assets usually struggle when bond yields stay high and growth looks shaky. Instead, listed REITs have beaten the stock market badly. As of March 31, the FTSE Nareit All Equity REITs Index was up 3.8% for the year, while the Dow Jones U.S. Total Stock Market was down 4.0%. That gap is about 780 basis points. The card’s 743-basis-point figure points to a slightly different benchmark, but the story is the same: REITs have been winning. Health care and shopping-center names helped lead the move. (reit.com) That is the surprising part. The more important part is why. REITs are doing well because investors have stopped treating the whole sector like one trade on interest rates. They are paying attention to property types again. Health care REITs own buildings tied to aging demographics and long leases. Strip-center REITs own grocery-anchored centers that people keep visiting even when consumers pull back elsewhere. Those are not glamorous businesses. They are steady businesses, and in a nervous market steady has been enough. Nareit’s live sector data still showed health care and shopping centers in positive territory in early April even after the March selloff. (reit.com) March matters here because it changed the shape of the rally. Before that dip, REIT gains were broader and much hotter. By the end of March, the sector had given back a lot of momentum but still held onto its lead over the wider market. That tells you this was not just a speculative burst. It was a rotation into assets with visible cash flow. Public real estate did not soar because conditions were easy. It held up because conditions were hard. (reit.com) Once listed real estate starts outperforming while many stocks fall, another force kicks in. Buyers start looking at public REITs as inventories of buildings that can be bought in one shot. That is why the second half of this story is about consolidation. S&P Global found that REIT M&A accelerated in the second half of 2025 after a weak 2024. Public-REIT-to-public-REIT transactions reached about $11.1 billion in 2025, and health care was one of the active areas. PwC, looking ahead to 2026, described public-to-private REIT deals and industry consolidation as a defining feature of the sector. (spglobal.com) Blackstone is the clearest example. In 2024 it agreed to buy Apartment Income REIT for about $10 billion and Retail Opportunity Investments for about $4 billion. The ROIC deal closed in February 2025. Those were not random bets. Apartment Income owned rental housing. ROIC owned 93 grocery-anchored shopping centers on the West Coast. Blackstone was buying exactly the kinds of assets public markets had struggled to price cleanly. (spglobal.com) That pattern did not stop with Blackstone. In 2025, Welltower agreed to acquire NorthStar Healthcare Income, CareTrust agreed to buy Care REIT in the U.K., City Office REIT signed a merger agreement in July, Paramount Group signed one in September, Plymouth Industrial followed in October, and Veris Residential signed a take-private agreement on February 23, 2026. Nareit now maintains a dedicated monthly mergers-and-acquisitions update for the publicly listed U.S. REIT market because this is no longer a side plot. It is part of how the sector is being repriced. (spglobal.com) The market is rewarding REITs for being boring in the right way. Then private capital is stepping in and asking whether the stock market is still the best home for those properties at all. On Monday afternoon, Nareit’s real-time index page still showed shopping centers up 1.75% on the day and health care up 1.10%. (reit.com)