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REITs post strong Q2 results, but investor sentiment lags amid high rates
Hoya Capital data covering more than 200 U.S. REITs and homebuilders found 83 percent raised full-year funds from operations guidance, while the Equity REIT Index fell 0.7 percent between July 12 and Aug. 11.
Real estate investment trusts delivered strong second-quarter 2026 results across multiple property types, according to a new report by Hoya Capital, even as higher interest rates continue to weigh on investor sentiment.
Hoya Capital said it compiled data from more than 200 U.S. REITs and homebuilders that reported second-quarter earnings, finding 83 percent of publicly traded REITs raised full-year funds from operations guidance, while 4 percent lowered their outlooks. The firm described the quarter as one of the cleanest reporting periods in recent memory, with unusually broad guidance raises and improving property-level fundamentals.
The report pointed to sector-specific momentum, including a 16 percent year-over-year rise in national office leasing to 62.4 million square feet in the second quarter, supported by earnings from SL Green Realty and BXP. It also cited retail occupancy nearing pre-pandemic levels and strength in industrial activity tied to the data center development cycle.
Even with the fundamentals improving, Hoya Capital said sentiment has been dampened by higher-for-longer borrowing costs. From July 12 through Aug. 11, the Equity REIT Index declined 0.7 percent while the S&P 500 gained nearly 4 percent, and the Equity REIT Index remains up 11.6 percent for the year.
The firm said REITs are adapting to the environment by raising capital and pursuing mergers and acquisitions or portfolio sales, but investors have been slower to fully embrace the improving earnings picture. Housing-related cash flow updates are still being filtered through expectations around rates, according to Hoya Capital’s findings.
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