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2025 REIT market perspectives and a look ahead

April 9, 2025
Kelly Rush, CFA
Chief Executive Officer, Public Real Assets & Chief Investment Officer, Real Estate Securities
Todd Kellenberger, CFA
Client Portfolio Manager, Real Estate Securities
Nina Liu, CFA
Portfolio Specialist, Listed Real Assets
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Markets are experiencing incredible turbulence this year with Trump imposed tariffs sparking a global trade war and increasing geopolitical tensions. With uncertainty on how these issues will be resolved, downside risks to markets are rising and investors should consider diversifying portfolio risk. In this environment, the performance of listed REITs has been resilient, with REITs off to one of the best starts relative to equity markets in a decade. This paper discusses how listed REITs offer a compelling opportunity as a valuable tool for navigating a challenging year ahead.

Key reasons to own REITs include:

  • REITs are likely to be favored by investors in a defensive market rotation
  • REITs are relatively insulated from tariffs and other Trump policies
  • Slower economic growth is likely and so are lower real yields. Falling real yields can be a big tailwind for REIT market performance.
  • Real estate and REIT valuations were already depressed and screening cheap before ‘Liberation Day’
  • Fundamentals are steady with supply slowing and earnings are durable across most sectors
  • REITs provide attractive diversification with low correlations to Mag 7 stocks

Caveats to our outlook

  • A significant economic recession would likely create a material sell-off for all risk assets, including REITs.
  • Stagflation is a risk, but this time may be different. Post ‘Liberation Day’ long-term market-based inflation expectations remain anchored. If the Fed judges tariffs as transitory inflation, this could create a scenario whereby the Fed cuts rates as it prioritizes the employment part of its mandate in an economy facing a recession.

Markets are experiencing incredible turbulence this year. With uncertainty on how issues will be resolved, downside risks to markets are rising and investors should consider diversifying portfolio risk. Read our 6 key themes for REITs right now.

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Risk Considerations
Investing involves risk, including possible loss of principal. Real estate investment options are subject to some risks inherent in real estate and real estate investment trusts (REITs), such as risks associated with general and local economic conditions. Investing in REITs involves special risks, including interest rate fluctuation, credit risks, and liquidity risks, including interest conditions on real estate values and occupancy rates.

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MM14441 | 04/2025 | 4083938 -122026
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