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REIT outlook shifts toward income as the market moves into expansion

Principal Asset Management’s Rich Hill said REIT expansions typically last about 12 years and are driven as much by income returns as by price gains.

Reported · Written up by our desk · REITs

Principal Asset Management research and strategy chief Rich Hill said the REIT market’s transition from recovery into expansion is a key signal for the broader commercial real estate outlook, noting that REIT gains in 2026 reflect a renewed preference for income-focused performance.

Speaking on the REIT Report podcast, Hill said “predictable earnings and income-driven total returns” are becoming more attractive again, after being out of favor for several years.

Hill said the current cycle should be understood in a longer-term framework because market expansions often last around 12 years, largely due to the role of underappreciated income returns rather than price returns alone.

He also emphasized that commercial real estate should not be treated as a single asset class, and argued that both public and private real estate could do well as investors reconsider their portfolio allocations across multiple subsectors, while positioning REITs as a potential diversifier.

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