This detailed report provides a thorough analysis of the Real Estate Investment Trust (REIT) sector's performance, focusing on key trends and statistics through the first half of 2025. It delves into the average total returns across various market capitalization segments and property types, shedding light on the sector's recovery dynamics. The analysis further explores crucial financial metrics such as Funds From Operations (FFO) multiples, dividend yields, and Net Asset Value (NAV) premiums and discounts. Additionally, the report examines the broader economic context, including corporate bankruptcies and adjustments in FFO guidance, offering a holistic perspective on the sector's current state and its potential trajectory. Investors will find valuable insights into which property types and individual securities present compelling opportunities.

Real Estate Investment Trust Sector: June 2025 Performance Review and Future Outlook

In June 2025, the Real Estate Investment Trust (REIT) sector continued its recovery, recording a notable 2.56% average total return. This marked a positive step forward, although the sector's gains trailed behind the broader market indices, with NASDAQ, S&P 500, and Dow Jones Industrial Average all demonstrating stronger performances. The Vanguard Real Estate ETF (VNQ) showed a more modest increase of 0.69%, indicating that individual REITs, on average, outpaced the ETF.

A significant development during this period was the robust outperformance of micro-cap REITs, which surged by 7.19% in June, marking their first instance of leading the market this year. In contrast, small-cap, mid-cap, and large-cap REITs experienced more contained gains of 2.99%, 1.80%, and 0.03%, respectively. Despite these recent movements, large-cap REITs have retained their lead over small-cap counterparts by a substantial 581 basis points since the beginning of 2025.

Across property types, June witnessed a broad recovery, with 13 out of 18 categories, or 72.22%, posting positive average total returns. The strongest performers were Office REITs, which saw a 7.60% increase, and Single Family Housing REITs, growing by 5.60%. Conversely, Self-Storage and Timber REITs were the weakest links, declining by 3.47% and 2.49% respectively. Year-to-date, Health Care REITs, with an 8.98% return, and Casino REITs, at 7.35%, emerged as the top performers, while Hotel, Office, and Shopping Center REITs faced significant double-digit declines.

The sector's valuation, as measured by the average Price/FFO (2025Y), slightly increased by 0.1 turns to 13.7x in June. Data Centers (27.6x), Land (24x), and Multifamily (23x) commanded the highest multiples, reflecting investor confidence in these segments. In contrast, Hotels (6.3x), Office (8.9x), and Malls (9.1x) traded at single-digit FFO multiples, signaling potential undervaluation or perceived higher risks.

Individual REIT performance exhibited wide variations. Wheeler REIT (WHLR) astonishingly led the sector with a 52.26% gain in June. However, this rebound barely scratched the surface of its year-to-date decline of 98.72%, underscoring severe underperformance that has plagued the company for years. On a challenging note, Presidio Property Trust (SQFT) continued its downward spiral, ending the first half of 2025 with a 34.62% year-to-date loss, despite a reverse stock split aimed at regaining NASDAQ compliance.

Dividend news brought some positive developments, with seven REITs announcing dividend increases in June. Sun Communities (SUI) led the charge with a 10.6% hike, contributing to the 45 REITs that increased dividends in the first half of 2025. Notably, the report also highlighted REITs that offer monthly dividends, providing smoother cash flow for investors.

From an economic standpoint, corporate bankruptcies, though slightly down from the previous month, remained elevated in June 2025. The first six months of the year recorded more filings than any comparable period since 2010, indicating persistent economic headwinds. However, a silver lining appeared in FFO per share guidance adjustments during the second quarter. While 63.5% of REITs maintained their guidance, 71% of those that did adjust their forecasts revised them upwards. Major upward revisions, excluding SUI due to its marina portfolio transaction, came from CareTrust REIT (CTRE), Host Hotels & Resorts (HST), and Alexander & Baldwin (ALEX). Conversely, the Hotel and Communications sectors saw the most significant downward revisions.

Looking ahead, S&P Global Market Intelligence predicts further dividend hikes for 18 equity REITs in Q3 2025, with RLJ Lodging Trust (RLJ), Alexander & Baldwin (ALEX), and Welltower (WELL) anticipated to lead with the largest increases. This positive outlook, coupled with rising FFO per share and increased dividend distributions, suggests a potentially strong total return performance for many REITs throughout the remainder of the year.

Reflecting on the REIT Landscape: A Journalist's Perspective

As I pour over the detailed figures and trends of the REIT sector in mid-2025, a compelling narrative of resilience and selective opportunity unfolds. The market, much like a seasoned investor, is sifting through the noise, distinguishing between fleeting recovery and sustainable growth. The strong rebound of micro-cap REITs in June, for instance, whispers tales of overlooked value and nimble adaptation, a stark contrast to the persistent struggles of some larger entities like Wheeler REIT. This disparity reminds us that market capitalization alone is not a guarantor of stability, and indeed, smaller players can sometimes demonstrate surprising agility in dynamic environments.

The varying performances across different property types underscore the intricate dance between economic shifts and real estate fundamentals. While office and single-family housing REITs basked in a period of positive returns, the continued woes of self-storage and timber sectors highlight the importance of granular analysis beyond generalized market sentiment. It prompts me to consider whether these underperforming segments are truly facing insurmountable challenges or merely experiencing cyclical downturns that might eventually present deep value opportunities for the patient and discerning investor.

The consistent increase in FFO per share guidance and dividend distributions among a significant portion of REITs paints a picture of underlying health and operational efficiency. It's a testament to the sector's commitment to delivering shareholder value, even amidst fluctuating economic conditions. However, the shadow of elevated corporate bankruptcies serves as a critical reminder of the broader economic fragility. It compels us to question how long this dual reality can persist – a recovering REIT sector within an economy still grappling with solvency issues. The divergence calls for a cautious optimism, an appreciation of the sector's strengths tempered by an awareness of external pressures.

Ultimately, this snapshot of the REIT market is more than just numbers; it's a story of adaptation, strategic positioning, and the perennial quest for yield. For investors, it reinforces the timeless principle that detailed research and a nuanced understanding of specific sub-sectors are paramount. It’s not just about buying into 'REITs' as a monolithic entity, but rather, carefully selecting the right properties and the right management teams who can navigate the complexities of an evolving real estate landscape and continue to generate reliable income. The coming months will undoubtedly reveal whether the seeds of recovery sown in June will blossom into sustained prosperity.

International equity markets are currently showing significantly stronger growth compared to their counterparts in the United States. This unexpected shift marks a departure from historical trends, compelling investors to re-evaluate their portfolios and consider broader global diversification. While US stocks, including major tech players, have seen some appreciation, their gains are notably outstripped by several international markets, creating a unique investment landscape.

This period of international market leadership is influenced by a confluence of economic factors, including contrasting monetary policies, shifts in valuation, and currency fluctuations. Investors now have a compelling rationale to explore opportunities beyond their domestic borders. Fortunately, with various accessible investment vehicles, engaging with global markets has become more straightforward than ever, enabling a strategic repositioning of assets to capitalize on these evolving market dynamics.

Global Equities Surpass US Market Performance

In 2025, a striking divergence in market performance has emerged, with global stock markets significantly outperforming the US equity market. This phenomenon is particularly notable given the long-standing trend of US market dominance since the Great Recession. While the S&P 500 has seen a respectable 7% increase, several international markets, such as those in Greece and Poland, have experienced extraordinary surges, with gains exceeding 50% for their respective ETFs. This stark contrast highlights a critical shift in investment appeal, drawing attention to the robust returns available outside the US. The MSCI All-World ex U.S. Index, which tracks developed and emerging global stocks excluding US companies, has registered an impressive 17% gain, underscoring the widespread strength of international markets.

The underperformance of US equities in 2025 can be attributed to several key macroeconomic factors. Firstly, persistent higher-for-longer interest rates and restrictive policies from the Federal Reserve are creating monetary headwinds for US stocks, impacting earnings growth. Secondly, a 'valuation fatigue' has set in, particularly within the US tech and growth sectors, which entered the year with very high valuations. This has prompted a reallocation of capital towards undervalued international markets, notably in Europe and emerging Asia, where growth prospects appear more attractive relative to their current prices. Lastly, the depreciation of the US dollar throughout the year has provided a substantial boost to foreign stocks by increasing the dollar value of their earnings and enhancing the competitiveness of exporting economies. These combined forces have created a fertile ground for international markets to thrive, presenting a compelling case for investors to broaden their horizons beyond traditional US-centric portfolios.

Navigating International Investment Opportunities

The current landscape of global market outperformance, while not unprecedented, is a relatively infrequent occurrence, especially when viewed against the backdrop of post-Great Recession trends. Historically, US equities have delivered superior long-term returns, underpinned by consistent earnings growth, leadership in innovation, and agile labor markets. However, periods of international outperformance, such as those observed in 2022, 2017, and 2012, typically coincide with significant policy divergences, the normalization of valuations across different regions, and a rotational shift in investment focus away from US growth sectors. This cyclical nature suggests that while the current trend is compelling, a balanced perspective on long-term investment strategies remains crucial. Understanding these historical patterns can help investors contextualize the current market movements and make informed decisions about diversification and exposure to international assets.

For investors seeking to capitalize on the robust performance of international markets, numerous avenues are available through leading brokerage platforms that facilitate global trading. One popular option is American Depository Receipts (ADRs), which allow US investors to purchase shares of foreign companies on US exchanges, simplifying cross-border investments by eliminating the need to navigate foreign stock markets and converting dividends into US dollars. Similarly, Global Depository Receipts (GDRs) offer a comparable mechanism for trading shares of foreign companies on international exchanges, providing broader access to global markets. Beyond direct equity exposure, global mutual funds offer diversified portfolios that invest in both US and international stocks, managed by professionals who strategically select companies across various developed and emerging markets. Furthermore, International Exchange-Traded Funds (ETFs) provide a convenient way to track indices composed of non-US companies, offering exposure to specific regions or sectors like Japan, Germany, or burgeoning emerging markets such as India and Brazil. Lastly, investing in Multinational Corporations (MNCs) provides an indirect route to global growth, as these companies, despite being headquartered in one country, derive a substantial portion of their revenues and profits from international operations, thereby offering inherent global diversification.