US REITs Outperform Stocks as Fundamentals Improve
US Real Estate Investment Trusts (REITs) have outperformed major stock indices in the first eight months of 2026, returning 16.7% compared to the S&P 500's 13.1%. Hazelview Investments attributes this performance to stronger fundamentals such as rising occupancy rates and improved net operating income (NOI). US REITs reached a four-year high in Q2 with an average occupancy rate of 93.8%, supported by declining supply pipelines across key sectors like hotels, retail, industrial, and office markets. The sector's performance is notable given the rise in Treasury yields from 4.2% to 4.8%. However, REITs have shown reduced sensitivity to interest rates compared to previous years, with a weaker correlation between bond yields and returns. Capital activity has also increased significantly, including $3.2 billion in stock buybacks during Q1 and over $58 billion in M&A deals through June.
Topics: bond yields MSCI World Index NOI growth occupancy rates REITs S&P 500