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REITs are in good shape to take advantage of a better investment market in 2026, according to Nareit’s quarterly REIT Industry Tracker, provided first to The First Draft.
Funds from operations rose 17.3% YOY as almost two-thirds of REITs logged improvement. Net operating income is up 5.2% as nearly 62% of REITs juiced the metric.
Nareit said the data shows REITs focused in on operations in Q3, shored up their balance sheets and are poised to grow again. Leverage ratios are low, averaging 32.9% debt-to-market assets, and 88.7% of listed REITs’ total debt is fixed-rate.
It isn’t a full-on shopping spree yet, but net acquisitions rose last quarter after dropping all year. Healthcare and retail REITs are bulking up the most, while residential REITs are the deepest into disposition mode.
Data center REITs are sitting in neutral — perhaps because building them is wildly attractive, but buying them is not. And while debt is becoming a major concern in data center world, Nareit shows those REITs are using cash as a higher percentage of their liquidity than any other asset class.
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