Core Insights - REITs and related ETFs have shown limited movement following the Federal Reserve's interest rate cut, suggesting that the impact was already factored into the market [1] - The ALPS Active REIT ETF is noteworthy due to its significant allocation to retail REITs, which are showing a more favorable outlook than previously anticipated [2][3] Retail REIT Performance - According to Nareit's quarterly REIT Industry Tracker, retail property operations have remained robust, with year-over-year increases in funds from operations (FFO) and net operating income (NOI) of 5.1%, and same-store net operating income (SS NOI) rising by 4.0% as of Q2 2025 [3] - The average retail occupancy rate stands at 96.6%, the highest among traditional property types, indicating strong demand [3] Dividend Outlook - The trailing 12-month dividend yield for REITs is 3.12%, suggesting potential for growth in dividends as interest rates decline [3][4] - Retail REITs have maintained disciplined balance sheets, with an average leverage ratio of 34.6% and a significant portion of fixed-rate and unsecured debt [5] Strength in Mall REITs - Mall REITs are identified as potential strengths within the retail real estate sector, with a notable percentage of U.S. malls receiving high grades from Green Street [6][7] - Approximately 25% of malls are rated A or better, indicating a positive outlook for these properties, while over half are rated B- or worse, suggesting challenges for lower-rated malls [7]