A recent Nareit commentary highlighted and quantified the persistent public-private real estate valuation gaps across the four traditional property types. While these dislocations have presented challenges for the property market and some participants, they have enhanced the relative attractiveness of REITs. REITs have also maintained average occupancy rates comparable to or higher than those of private real estate across these property sectors. For value-focused investors, REITs may offer an appealing investment opportunity.
The chart above displays a scatter plot of public and private real estate cap rates and occupancy rates for the four traditional property types—apartments, industrial, office, and retail—as of the second quarter of 2026. It presents data from Nareit’s REIT Industry Tracker and NCREIF’s Open End Diversified Core Equity (ODCE) fund properties.
Across all property types, REIT implied cap rates were higher than their corresponding ODCE appraisal cap rates. In the second quarter of 2026, the public-private cap rate spreads were 194, 172, 117, and 46 basis points for office, apartments, industrial, and retail, respectively. All else equal, these spreads suggest that REITs offer more attractive pricing relative to private real estate across the examined property types. Pricing in some sectors like office and apartments remains particularly compelling.
REIT occupancy rates exceeded comparable ODCE metrics in every property type except industrial. Office and retail had the largest differentials at 6.9% and 3.9%, respectively. The apartment occupancy rate difference was 0.7%, and the industrial gap was -1.0%. REITs’ high and higher occupancy rates likely reflect greater operational focus and better property selection.
REITs give investors access to well-located, high-quality, institutional-grade properties managed by best-in-class operators. Across the four traditional property types, REITs have maintained a pricing advantage and delivered occupancy rates akin to or above those of private real estate. These two factors present a compelling buying opportunity for value-focused property investors.