REITs and Real Estate

REITs and Real Estate Strategy

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Thesis

Why this sector matters to investors right now. Structural, not market timing.

Listed US REITs are a tax status wrapped around several different rent checks. IRC 857 still requires a 90 percent taxable-income distribution to keep pass-through status, which is why public listed REITs paid about $71 billion of dividends in 2025 (Nareit July 2026 snapshot; IRS Form 1120-REIT instructions). The 10-year Treasury rose from 1.52% at the end of 2021 to 4.58% at the end of 2024 and printed 4.70% on August 24, 2026 (FRED DGS10). That reset cut FTSE Nareit All REITs equity market cap from $1.74T at year-end 2021 to $1.27T at year-end 2022. By July 31, 2026 the index was $1.66T with 183 constituents (Nareit). The rebuild is not one cycle. Health care ($302B), retail ($258B), industrial ($198B), residential ($173B), and towers ($133B) are the large listed slices on this page. Data centers were $205B and stay on Data Centers.

The 2026 scoreboard is occupancy and rent change inside each vertical, not a single REIT multiple. Prologis ended 2025 at 95.8% period-end occupancy with about 50% net-effective rent change on the year's rollovers. Welltower SHO same-store NOI rose 20.4% in Q4 2025. Simon's malls ended 2025 96.4% occupied. BXP's in-service office book was 86.7% occupied. Vivmark Residential closed August 17, 2026 as Equity Residential plus AvalonBay, with more than 184,000 apartments. Those prints do not average.

Structural drivers

Forces that shape long-run demand and economics. Each driver is sourced.
  • •The statutory distribution test forces cash out of the sector every year. IRC 857 requires dividends equal to at least 90% of REIT taxable income (excluding the dividends-paid deduction and net capital gain) to keep REIT status (IRS Instructions for Form 1120-REIT, 2025). Nareit reports public listed REITs paid about $71B in 2025, of which 79% qualified as ordinary taxable income.
  • •Seniors housing is still filling rooms. Welltower SHO same-store occupancy rose 400 bps year over year in Q4 2025, with RevPOR +4.7% and SHO SSNOI +20.4% (Welltower Q4 2025 release). Ventas same-store SHOP occupancy was 90.1%, up 300 bps, with SHOP cash NOI +15% (Ventas 4Q25 supplemental). Both point to demand outrunning new supply in needs-based housing.
  • •Logistics still has in-place rents below market. Prologis said 2025 rollovers lifted net effective rent about 50% on its share, with about 18% remaining mark-to-market at December 31, 2025, even after recent quarters of flatter market rents (Prologis FY 2025 results and 2025 annual report).
  • •Towers remain a carrier-lease annuity. American Tower had 149,686 sites and $10.645B of 2025 revenue, 97% from property operations (AMT 2025 10-K). Crown Castle is selling fiber and small cells for $8.5B (agreement March 13, 2025) and will be a US tower REIT after close (CCI 2025 10-K). SBA owned 46,328 towers, 17,394 of them in the US (SBAC 2025 10-K).
  • •Open-air and net-lease retail held occupancy through 2025. Kimco pro-rata occupancy was 96.4%. Federal Realty was 94.1% occupied and 96.1% leased. Realty Income was 98.9% occupied on 15,511 properties (issuer FY 2025 disclosures). Simon mall occupancy was 96.4% with trailing sales of $799 per square foot.
  • •The services layer is growing even when landlords are not buying. CBRE revenue rose from $31.95B in 2023 to $40.55B in 2025 (CBRE year-end releases). CoStar revenue rose from $2.736B in 2024 to $3.247B in 2025, with Q4 at $900M (CoStar FY 2025 release).

Structural risks

Forces that could compress demand, change economics, or break the thesis.
  • •Long rates can reprice the whole listed book again. FRED DGS10 ended 2025 at 4.18% and printed 4.70% on August 24, 2026. A move back toward the 2024 year-end 4.58% (or higher) raises implied cap rates and the cost of the external capital REITs must raise because they cannot retain earnings.
  • •Carrier concentration and the DISH/EchoStar dispute sit on the tower book. American Tower's top four customers were T-Mobile 18%, AT&T 17%, Verizon 14%, and Telefónica 10% of 2025 revenue. DISH was about 2% of 2025 property revenue and was in default under its SCA as of January 2026 (AMT 2025 10-K). Crown Castle says about 90% of site-rental revenue comes from T-Mobile, AT&T, and Verizon (CCI 2025 10-K coverage).
  • •Office has not earned its way back to a mid-90s occupied print. BXP's in-service portfolio ended 2025 86.7% occupied and 89.4% leased. Management framed a path toward about 91% occupancy by the end of 2027 if leasing stays near 4 million square feet a year (BXP 2025 annual report). That is a plan, not a print.
  • •Apartment supply and the Vivmark integration are the housing risks. Invitation Homes same-store occupancy slipped to 96.8% for 2025 from 97.3% in 2024 (Invitation Homes FY 2025 results). Vivmark closed August 17, 2026. A merger of that size can miss synergy timing even when the unit count (184,000+) is real.
  • •Net-lease client credit is not the same as shop occupancy. Realty Income's 98.9% occupancy can sit next to tenant bankruptcies in dollar stores, theaters, or casual dining, which are named rent lines in the 2025 annual report. VICI's $4.0B revenue is a casino-operator rent check.
  • •Self-storage occupancy has already cooled. Public Storage same-store average occupancy was 92.0% in 2025, down from 92.4% in 2024 and 92.9% in 2023 (PSA 2025 annual report). New supply shows up here before it shows up in towers.
  • •Data-center power and capex live on another page, but they still bid for capital and construction labor. Nareit assigned $205.0B of equity cap to data centers at July 31, 2026. That bid can lift industrial land values (a Prologis positive) and crowd out other property types.

Competitive landscape

How to think about the players. Framing along axes (pure play vs diversified, incumbent vs challenger, etc). Not stock picking.

Think in five archetypes, not one REIT multiple.

1. Infrastructure landlords (AMT, CCI, SBAC, PLD, WY). Towers lease space to three US carriers on long contracts. Prologis leases boxes to shippers. Weyerhaeuser sells logs. Do not average the three cash-flow shapes.

2. Healthcare and housing operators (WELL, VTR, DOC, VMRK, CPT, ESS, MAA, UDR, INVH). Welltower and Ventas run seniors housing. Vivmark is the new apartment scale vehicle (EQR + AVB). Invitation Homes is single-family. Healthpeak is medical office and life science, not SHO.

3. Retail and net lease (SPG, KIM, REG, FRT, O). Malls, grocery-anchored centers, street retail, and triple-net are four products. Occupancy prints in the mid-90s do not make them substitutes.

4. Office and gaming (BXP, ARE, VICI, HST). BXP is CBD office. Alexandria is life-science campus. VICI is casino real estate. Host is hotels.

5. Services (CBRE, CSGP). Not REITs. They sell labor and data into the same buildings.

Equinix, Digital Realty, and Iron Mountain stay on Data Centers. American Tower's 30 US data centers do not change that line.

Key metrics to watch

The operational and financial metrics that matter most in this sector. Each one names its source and update cadence.
MetricSourceFrequencyWhy it matters
FTSE Nareit All REITs equity market cap and property-type mixNareit monthly snapshot and FTSE Nareit constituent filemonthlyTells you which property types the public market is actually willing to own. Health care overtaking retail is a 2026 fact, not a slogan.
10-year Treasury yield (DGS10)FREDdailyThe discount rate for long-duration rent. 2022 showed that a 200-plus bps backup can cut listed REIT equity cap by a quarter in one year.
Same-store occupancy and rent change by property typeIssuer 10-K / 10-Q and quarterly supplements (PLD, WELL, VTR, SPG, KIM, BXP, INVH, PSA)quarterlyThe only way to see whether a landlord is still growing cash after the rate shock. Definitions are not standardized.
Tower site count and carrier concentrationAMT, CCI, and SBAC 10-K customer tablesannual, with quarterly leasing commentaryThree tenants write most of the US tower check. A DISH-style default is small in percent and large in sentiment.
Prologis remaining lease mark-to-marketPrologis quarterly resultsquarterlyThe stored rent gap. If it compresses toward zero while occupancy holds, the growth story is over even if the buildings stay full.
CBRE revenue and CoStar net new bookingsCBRE and CoStar quarterly releasesquarterlyA read on transaction volumes and information spend that does not require a REIT to buy a building.
Vivmark integration: occupancy, overlap markets, and stated synergiesVivmark / former AVB and EQR 8-Ks and the first combined quarterquarterly after the August 17, 2026 closeThe largest US apartment combination in the listed set. The unit count is known. The combined operating print is not.

Catalysts and milestones

Known upcoming events that could move the sector. Dated where possible.
  • •Crown Castle fiber and small-cell sale to Zayo and EQT for $8.5B, signed March 13, 2025, expected to close in the first half of 2026 (CCI 2025 10-K and FY 2025 release). Close turns CCI into a pure tower REIT.
  • •First Vivmark combined quarter after the August 17, 2026 close. The closing exhibit gave 184,000+ apartments and about $51B of equity value. It did not give a combined same-store occupancy print.
  • •Prologis 2026 occupancy and cash same-store NOI guide (average occupancy 94.75% to 95.75%; cash SSNOI 5.75% to 6.75% on Prologis share) versus the Q4 2025 prints (Prologis FY 2025 results).
  • •Welltower 2026 blended SSNOI guide of 11.25% to 15.75%, with SHO 15% to 21% (Welltower Q4 2025 release). A miss would say the occupancy catch-up is done.
  • •CoStar FY 2026 revenue guide of $3.78B to $3.82B, about 17% growth at the midpoint (CoStar FY 2025 release).
  • •CBRE 2026 Core EPS guide of $7.30 to $7.60, 17% growth at the midpoint (CBRE FY 2025 release).
  • •AMT DISH/EchoStar litigation. DISH delivered a September 24, 2025 notice purporting to excuse SCA obligations and was in default as of January 2026 (AMT 2025 10-K).

What would change the view

Conditions or evidence that would invalidate the thesis or materially shift the risk picture.
  • •The 10-year yield moves back through 5% and stays there while same-store NOI growth rolls over in more than one large vertical. That would reprice the listed book the way 2022 did.
  • •Prologis remaining mark-to-market compresses toward zero and period-end occupancy falls out of the mid-95s. The industrial compounding story would then be a volume story, not a rent story.
  • •Welltower or Ventas same-store occupancy change turns negative for two quarters. The seniors-housing recovery would then be a 2023-2025 catch-up, not a multi-year operator cycle.
  • •Vivmark's first two combined quarters show occupancy or turnover worse than the stand-alone EQR and AVB run-rate, or the company cuts the development pipeline that the close exhibit put at 11,100 units and $4.4B.
  • •BXP leased occupancy fails to rise from 89.4% toward the low-90s by the end of 2027. Gateway office would then be a coupon, not a recovery.
  • •A US national carrier merger or a second DISH-style default that is material to AMT, CCI, or SBAC site-rental revenue. Tower growth is tenant capex plus colocation, not new land.
  • •Realty Income occupancy drops out of the high 90s because a named tenant line (dollar stores, theaters, restaurants) fails in size. Net lease would then show the credit risk that occupancy had been hiding.

What we are not covering

Sub-areas, technologies, or companies we are deliberately excluding from the analysis, and why.
  • •Equinix, Digital Realty, and Iron Mountain. Data-center landlords stay on the Data Centers page even though Nareit still files them under REITs.
  • •Mortgage REITs as a strategy book. The Nareit mix shows $63.6B of mortgage REIT equity cap at July 31, 2026. They are in the industry total, not on this roster.
  • •Private real estate, non-traded REITs, and open-end core funds. Nareit says listed and private REITs together own over $4.5T of commercial real estate assets. This page is the listed S&P 500 slice plus CBRE and CoStar.
  • •Homebuilders, building products, and housing-related industrials. Those names live on Housing and Building Products.
  • •Hotel brands, cruise lines, and OTAs. Host is here as a hotel REIT. The brand operators live on Travel.
  • •Custom per-company KPI floors. Deferred on purpose for this roster.

Sources

Primary sources cited in this analysis. Links open in a new tab.

Audit trail

Record of the last review and what changed. Required on every refresh.
Last reviewed: 2026-08-25
Change log
  • 2026-08-25Replaced the scaffold thesis with sourced strategy. Figures pulled from Nareit July 2026, FRED DGS10, IRS 1120-REIT instructions, and 2025 issuer 10-Ks and year-end releases for AMT, CCI, SBAC, PLD, WELL, VTR, SPG, KIM, FRT, O, BXP, PSA, INVH, CBRE, CSGP, VICI, and the August 17, 2026 Vivmark close. Occupancy prints that could not be sourced from a primary filing were left off.
Unresolved questions
  • •Alexandria, Regency, MAA, Extra Space, Healthpeak, Host, and Weyerhaeuser still need a 2025 occupancy or volume print pulled from the primary 10-K before they get their own chart.
  • •Welltower's absolute same-store SHO occupancy level (not the +400 bps change) was not in the Q4 2025 release text used here.
  • •Vivmark has no combined quarterly same-store print yet. The first 10-Q after close should replace the close-exhibit unit count.
  • •Crown Castle's fiber sale may slip past the first-half 2026 window. Confirm close or a revised date.
  • •AMT data-center revenue as a share of the $10.645B total was disclosed as a 10% data-center segment. Confirm whether that slice should be dual-homed in a later Data Centers refresh without moving the ticker off this page.
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REITs and Real Estate Strategy: Market Data | Sterling