# REITs Gain in 2026 as Property Fundamentals Offset Higher Rates

By Enna Lee

Canonical URL: https://www.tokenpost.com/news/investing/27982
Published: 2026-10-08T11:20:41.000Z
Updated: 2026-10-08T11:20:41.000Z
Section: Investing

> The FTSE Nareit All Equity REITs Index returned 7.9% through Sept. 30 despite a 5.7% September decline and a higher 10-year Treasury yield.

U.S. real estate investment trusts (REITs) have gained in 2026 despite higher Treasury yields, as improving property fundamentals and constrained construction have supported the interest-rate-sensitive sector.

The FTSE Nareit All Equity REITs Index returned 7.9% year to date through Sept. 30, even after falling 5.7% during September. The 10-year Treasury yield ended the month at 5.27%, compared with 4.18% at the end of 2025.

Higher yields can increase financing costs, pressure property values and make REIT dividends less attractive relative to bonds. But reduced development has limited future supply in several property categories, while existing properties continue to generate income.

Cash-flow growth is accelerating, and REITs entered the period with stronger balance sheets and better dividend coverage. Valuations also remain attractive relative to broader equities, while new supply has peaked in many parts of the market.

Seth Laughlin, head of real estate strategy and research at Cohen & Steers, estimated REIT earnings growth of about 9% in 2026 and roughly 8% in 2027.

“The truth is, under the hood, the economy is really healthy,” Laughlin said.

The link between REIT returns and 10-year Treasury yields has shifted over time, making the level or direction of rates an unreliable standalone measure of sector performance. September’s decline still showed that rising yields can weigh on the group.

Performance has varied by property type. Hotel, data-center and senior-housing REITs posted double-digit gains, while multifamily REITs remained under pressure from excess apartment supply and weaker rents. Higher mortgage costs could support apartment demand by making home purchases less affordable for some households.

REIT performance therefore reflects both continued rate sensitivity and support from operating cash flow, limited construction and balance-sheet strength. The sector’s 2026 gain remained positive through Sept. 30 despite the higher Treasury yield environment.