WASHINGTON, D.C. (May 20, 2025) – New data from the first quarter of 2025 demonstrate that REITs continue to maintain well-structured debt—90.9% of listed REITs’ total debt was at a fixed rate while 79.4% of their total debt was unsecured, according to Nareit’s quarterly REIT Industry Tracker released today. In addition, the weighted average term to maturity of REITs’ total debt was 6.2 years.
First quarter 2025 data also show that REIT balance sheets remain resilient amid market volatility and are well-positioned for the expected higher interest rate environment. On average:
- Leverage ratios were low with debt-to-market assets at 32.5%.
- The weighted average interest rate on total debt was 4.2%.
“In this period of elevated long-term interest rates, REITs’ balance sheets remain in good shape, largely because REITs continue to exercise great discipline in managing them,” said Nareit Executive Vice President of Research & Investor Outreach John Worth. “That discipline, combined with REITs’ solid operational fundamentals, should enable REITs to accelerate growth through property acquisitions when property transactions fully recover.”
Year-Over-Year Increases in NOI Illustrate REITs’ Solid Operations
The REIT Industry Tracker data show that despite macroeconomic uncertainty and market fluctuations, REITs displayed sound operational performance during the first quarter.
- Net Operating Income (NOI) was $29.3 billion, a 2.3% rise from one year ago.
- Same Store NOI experienced a 3.2% year-over-year gain, underscoring that REITs are keeping pace with inflation.
In addition, 62.6% of REITs reported having a year-over-year increase in NOI.
REIT FFO Experiences Year-Over-Year Growth
At the industry level, funds from operations (FFO) for all equity REITs was $18.9 billion, representing a 2.9% gain year over year. The sector level data provides a slightly more mixed picture with some sectors seeing larger than normal increases or decreases, mostly due to isolated issues, including those related to currency expenses and non-U.S. operations, among other things. A little more than half—or 51.7%—of REITs reported having a year-over-year increase in FFO.
“Looking at the comprehensive picture of operational performance and balance sheets, REITs remain well-positioned in the commercial real estate marketplace,” said Nareit Senior Vice President of Research Edward Pierzak. “They hold competitive advantages over their private counterparts and remain prepared to navigate economic uncertainty while pursuing accretive growth opportunities as they appear.”
For more data on REITs’ operational fundamentals, please read the complete Q1 2025 REIT Industry Tracker.