3 Reasons to own Listed REITs today

3 Reasons to own Listed REITs today

3 Reasons to own Listed REITs today

4 minute read

January 2025

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We see compelling evidence to own listed real estate in the current environment.

1. The second half of the 2020s will likely look more like previous decades

We believe the second half of the 2020s will look more like previous decades as longer-term returns are driven by healthy fundamentals.

U.S. listed real estate annual returns(1)

January 1991 – December 2024

U.S. listed real estate annual returns

2. U.S. REITs are trading at historic discounts relative to equities

Valuations relative to the broader equity market are meaningfully below the historical median. Attractively priced equity and REITs’ access to the unsecured bond market could allow real estate companies to take advantage of external growth opportunities.

U.S. real estate vs. U.S. equities earnings multiple spreads(2)

December 2004 – December 2024

U.S. real estate vs. U.S. equities earnings multiple spreads

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3. Historically, REITs have outperformed equities following steep multiple discounts

U.S. REITs have historically traded at slight earnings multiple premium to broad U.S. stocks, which we believe is warranted due to REITs’ rent-based recurring cash flows. With REITs currently at a -6.4x discount, any revision toward the historic median of 0.4x could benefit performance.

Historically, REITs have outperformed equities following steep multiple discounts

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