REITs look cheap
Hoya Capital says REITs are trading roughly 14.3–16.8x P/FFO — below the post‑GFC average — and balance sheets look healthy with debt under ~35% of enterprise value and ~4.9x interest coverage. They're still rate‑sensitive, so Hoya flags a material rebound scenario if the 10‑year Treasury slides meaningfully from ~4.40%. (x.com) (x.com)
Large‑cap REITs were trading at a roughly 16.4x P/FFO average in early 2026 while small‑caps sat near 12.8x, illustrating a wide valuation gap within the sector. (2ndmarketcapital.com) Industry data show aggregate REIT leverage remained modest: a market‑cap‑weighted debt ratio of about 32.9% and an interest‑coverage ratio near 4.3x as of the REIT association’s Feb. 27, 2026 snapshot. (reit.com) Hoya’s RIET strategy tracks 100 high‑dividend U.S. real‑estate securities and the ETF had roughly $95–$97 million in assets under management in mid‑March 2026. (hoyaetfs.com) (marketbeat.com) The U.S. 10‑year Treasury yield was around 4.39% on March 26, 2026, a level market participants repeatedly flag as the key rate that would need to decline to trigger broader multiple expansion for rate‑sensitive REITs. (tradingeconomics.com) (fred.stlouisfed.org) Market pricing shows little near‑term room for big Fed easing—CME‑derived tools implied a high probability the Fed would hold rates in March 2026—reducing the immediate odds of a meaningful 10‑year slide. (rateprobability.com) (cnbc.com) Multiple independent analyses find the relationship between REIT returns and the 10‑year has strengthened recently, with several firms noting that falling long‑term yields in the past three‑year window have correlated with improved REIT performance. (reit.com) (publicsecurities.brookfield.com)
