The State Of REITs: August 2025 Edition

REIT Performance Overview - REITs experienced an average decline of -1.17% in July, underperforming compared to broader market indices such as NASDAQ (+3.7%), S&P 500 (+2.2%), and Dow Jones (+0.2%) [1] - The Vanguard Real Estate ETF (VNQ) slightly outperformed the average REIT in July with a return of +0.09% and has outperformed year-to-date at +2.10% compared to the average REIT's -6.42% [1] - The spread between the 2025 FFO multiples of large cap REITs (17.6x) and small cap REITs (13.0x) widened, indicating that investors are paying 35.4% more for each dollar of FFO from large cap REITs [1] Property Type Performance - 66.67% of REIT property types averaged negative total returns in July, with a total return spread of 14.34% between the best (Infrastructure +5.08%) and worst (Land -9.28%) performing property types [5][6] - Over the first seven months of 2025, large cap REITs outperformed small caps by 547 basis points, with micro cap REITs showing a recent trend of outperformance [3][6] - The average P/FFO for the REIT sector remained unchanged at 13.7x in July, with 44.4% of property types experiencing multiple expansion [7] Individual Security Highlights - City Office REIT (CIO) surged by +32.26% in July following an acquisition announcement at $7.00/share, with the transaction expected to close in Q4 2025 [9] - Wheeler REIT (WHLR) faced a significant decline of -43.73% in July, marking a total return of -99.28% over the first seven months of 2025, the worst in the sector [10][12] - 39.35% of REITs had a positive total return in July, while the average year-to-date total return for REITs was -6.42%, significantly lower than the +3.83% return for the same period in 2024 [10] Dividend Yield Insights - High dividend yields are a key attraction for investors in the REIT sector, with many REITs trading below their NAV, resulting in attractive yields [14] - Opportunities exist to capitalize on high dividend yields that may justify the underlying risks associated with certain investments [15]