Second quarter REIT performance and sector specific trends were among the topics discussed during the July 14 FTSE Nareit U.S. Real Estate Indexes in Review & What’s Next webinar.
Hosted by Nareit and Institutional Real Estate, Inc. (IREI), the quarterly webinar featured John Worth, executive vice president of research & investor outreach at Nareit, and Brian Jones, managing director at Neuberger. Mike Consul, senior editor of IREI’s Real Asset Adviser magazine, moderated the discussion.
Worth highlighted the strength of REIT performance in the second quarter, and the continuation of that trend in early July. For the first time in a couple of years, REITs have been outperforming broader indices, he said. Lodging has been the best performing REIT sector in 2026 so far, with office posting a strong second quarter after weakness in the prior quarter.
Jones noted that investors are looking for themes outside of the AI-driven space, while small caps and value indices have appreciated. “That gives me a sense that there could be a shift in the leadership dynamic which would play well into more value-related sectors…I think there’s a good chance that the performance we’ve seen from REITs can continue,” he said.
Jones also pointed out that for most REIT sectors, the level of new construction is down significantly, while tenant demand is improving. Given strong underlying fundamentals and attractive valuations, he noted that REITs may be positioned for a period of strong relative returns, and the first half of 2026 may be the beginning of that trend.
Additional takeaways from the webinar include:
- Worth noted that office fundamentals are “definitely improving,” while Jones said there is a question around how quickly improved leasing trends will translate into earnings growth. Jones rates the office sector a hold.
- Jones described how Neuberger has had “good traction” in making the case that REITs deserve a space in multi-asset strategies, alongside equity, fixed income, and private assets.
- Worth commented on health care REITs, noting that demand tailwinds “are not going away anytime soon.” An important question for senior housing he said, is how quickly supply grows to meet demand. Jones added that health care REITs have seen improvements in operator efficiency.
- Lodging REITs have done well in 2026, Worth noted, reflecting their strong underlying operational performance.
- Concerns about potential regulations on the single-family rental sector, which haven’t materialized to the extent originally envisioned, did hit their valuations. This in turn has created an investment opportunity, Jones said.
- Globally, 2026 has been a tough year for REITs, Worth pointed out, with the U.S. generally outperforming Europe and Asia.
- Gaming REITs, to date, have not been negatively impacted by the rise of online gaming, Jones noted.
- REIT M&A activity this year shows the bulk of deal value occurring in public-to-public transactions, Worth said.
- Telecom REITs have been underperforming, as the sector waits for more mobile demand to be realized, Worth pointed out.
- Investors, consumers, and corporate entities have been dealing with uncertainty for some time, Jones noted, and it would take a meaningful geopolitical shock to trigger a market sell-off at this point.