Group 1 - REITs tend to outperform when interest rates fall due to lower borrowing costs and improved cash flows, which boost valuations [1][2][9] - REITs must pay out 90% of their taxable income as dividends, making their yields more attractive as Treasury and corporate bond yields decline [2] - The Vanguard Real Estate ETF returned 195% from December 2008 to December 2015 during a period of low interest rates, significantly outperforming the S&P 500's 126% return [3] Group 2 - Not all REITs will benefit equally from falling interest rates; different sectors will respond differently to lower rates [4][9] - Realty Income, founded in 1969, has a portfolio of 15,600 properties and has consistently grown its monthly dividends since going public in 1994, with a current yield of 5.3% [6][7] - Realty Income maintains a high occupancy rate of 98.6% and a weighted average remaining lease term of about nine years, contributing to its ability to generate rental revenue [8]