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REITs outperform broader indices as early 2026 leadership shifts
During a July 14 webinar recap, Nareit highlighted strong second quarter performance and said improving tenant demand is coming as new construction stays down across most REIT sectors.
Nareit, together with Institutional Real Estate, Inc., reviewed second quarter REIT performance and discussed what could come next during its “FTSE Nareit U.S. Real Estate Indexes in Review & What’s Next” webinar on July 14, featuring John Worth of Nareit and Brian Jones of Neuberger. Worth said REITs have shown strength in the second quarter and that the trend continued into early July, marking the first time in a couple of years that REITs are outperforming broader indices.
Worth also pointed to sector differences, saying lodging has been the top performing REIT sector in 2026 so far, and that office posted a strong second quarter after weakness in the prior quarter. Jones added that investors appear to be looking for themes beyond AI-driven areas, with small caps and value indices also having appreciated.
Jones suggested this could shift the leadership dynamic toward more value-related parts of the market, and said there is a “good chance” the performance seen from REITs can continue. He also noted that, across most REIT sectors, new construction levels are down significantly while tenant demand is improving, and he described REIT valuations as attractive.
Both speakers framed the setup as one that could support relative performance, with strong underlying fundamentals and the possibility that the first half of 2026 could be the start of a period of stronger REIT returns relative to other assets. Nareit also reiterated that REITs own or finance income-producing real estate across property sectors, and that most REITs trade on major stock exchanges.
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