Market Commentary

A recent Nareit commentary explored average annual net total returns for REITs and total private real estate, as well as private real estate investment styles, using realized pension fund performance from CEM Benchmarking.

CEM Benchmarking’s 2026 study, sponsored by Nareit, provides a comprehensive look at realized investment performance across asset classes, including real estate and its investment styles, over a 26-year period (1998–2023) using a dataset covering public and private sector pensions with nearly $4 trillion in combined assets under management.

REITs have raised approximately $10 billion in 2026, a figure that does not include first quarter ATM issuance due to a lag in reporting.

This case study demonstrates how certain strategies can utilize unique investment tools to achieve client objectives and risk preferences to enhance their investment experience with listed real estate. 

The FTSE EPRA Nareit Developed Index posted a total return of 1.3% through the first quarter of 2026, while the FTSE EPRA Nareit Developed Extended Index returned 0.9% for the same period.

A recent research note by Hodes Weill & Associates (HW) called REITs versus Private Real Estate Funds: Partners, Not Rivals addressed the merits of public and private real estate in an institutional investor’s portfolio.

Hodes Weill & Associates (HW) recently published a thoughtful research note, REITs versus Private Real Estate Funds: Partners, Not Rivals, that addressed the merits of public and private real estate in an institutional investor’s portfolio.

The wide gap between public and private real estate valuations has remained stubbornly slow-to-close.

The traditional real estate appraisal process works reliably during relatively stable real estate markets but reliance on the three established approaches—cost, sales comparison, and income—can be challenging when markets are volatile.

On a year-to-date basis as of March 31, REITs have outperformed broad market equities with the FTSE Nareit All Equity REITs Index posting a total return of 3.8%, while the Dow Jones U.S. Total Stock Market fell 4.0% and the Russell 1000 fell 4.2%.

While broad equity and REIT market valuation dislocations may be uncommon, historically, they have presented buying opportunities for REIT investors.

REIT performance began 2026 with a strong start.