REITs Up 20% in 2026, Doubling S&P 500 Returns So Far

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Real estate investment trusts (REITs — publicly traded companies that own income-producing properties) have returned roughly 20% year-to-date in 2026 compared with about 9% for the S&P 500, according to data from Nareit, the industry's trade association. John Worth, Nareit's executive vice president for research, attributes part of the outperformance to investors rebalancing away from concentrated tech holdings — particularly the 'Magnificent 7' large-cap tech stocks — toward what he calls 'resilient portfolios.' The gap between REIT valuations and stock valuations had widened to historically unusual levels by the end of 2025 (the S&P 500's price-to-earnings ratio was 1.3 times the comparable REIT multiple, versus a long-run average of 1.0), and that gap has since narrowed by about half, with Worth saying there may still be room to run.

For investors nearing or in retirement who are reassessing portfolio concentration risk, the data suggest REITs have provided meaningful diversification in a volatile year marked by Middle East conflict. Lodging REITs lead all sectors, up 50%; data center REITs are up 36%; healthcare REITs are up nearly 30%; and self-storage REITs have rebounded 26% after two years of underperformance. Worth also highlighted that more than half of REIT market value now sits in newer property types — data centers, cell towers, single-family rentals — sectors largely unavailable through traditional private real estate investing.