The State Of REITs: January 2026 Edition

2026-01-14 09:52:13 ET

REIT Performance

REITs finished 2025 in the red with a -1.48% December total return. REITs underperformed the broader market, falling short of slightly stronger returns from the Dow Jones Industrial Average (+0.92%), S&P 500 (+0.06%) and NASDAQ (-0.09%). The market cap weighted Vanguard Real Estate ETF ( VNQ ) fell short of the average REIT in December (-2.24% vs. -1.48%), but substantially outperformed over the full year (+3.26% vs. -3.57%). The spread between the 2026 FFO multiples of large cap REITs (15.9x) and small cap REITs (12.7x) narrowed in December as multiples contracted 0.3 turns for large caps and 0.1 turns for small caps. Investors currently need to pay an average of 25.2% 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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