The State Of REITs: April 2025 Edition

2025-04-21 12:22:45 ET

Summary

• REITs finished the first quarter of 2025 in the red (-3.36%) with a brutal -4.92% average total return in March.
• Large cap (-2.04%) and mid cap REITs (-2.63%) saw modest losses, but small caps (-4.16%) and micro caps (-16.19%) had a particularly bad month.
• Only 29.49% of REIT securities had a positive total return in March.
• Two thirds of REIT property types averaged negative total returns in March. Office (-11.60%) and Hotel REITs (-11.11%) averaged double-digit declines, whereas Casino (+2.40%) and Single Family Housing REITs.
• The average REIT NAV discount widened from-11.22% to -14.81 during March. The median NAV discount also widened from -13.47%to -17.43%.

REIT Performance

March was a tough month for REITs with a disappointing -4.92% total return. The REIT sector fell short of the Dow Jones Industrial Average (-4.1%), but saw smaller average losses than the S&P 500 (-5.6%) and NASDAQ (-8.1%). The market cap weighted Vanguard Real Estate ETF ( VNQ ) outperformed the average REIT in March (-2.58% vs. -4.92%) and has dramatically outperformed year-to-date (+2.69% vs. -3.36%). The spread between the 2025 FFO multiples of large cap REITs (18.1x) and small cap REITs (12.9x) widened again in March, as multiples contracted 0.2 turns for large caps and 0.4 turns for small caps. Investors currently need to pay an average of 40.3% more for each dollar of FFO from large cap REITs relative to small cap REITs. In this monthly publication, I will provide REIT data on numerous metrics to help readers identify which property types and individual securities currently offer the best opportunities to achieve their investment goals.

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