Stats › Long run returns › REITs
REIT returns
A REIT is a company that owns income producing property and, in exchange for its tax treatment, has to hand at least 90% of its taxable income to shareholders. That distribution rule is the reason the structure exists and it is why REITs pay so much more income than ordinary shares do. 2025 was a poor year for them. The main equity REIT index returned 2.3% while the Russell 1000 returned 17.4%. The gap has a fairly mechanical explanation, which the page works through. The 10 year Treasury finished the year at 4.18% while equity REITs yielded 4.07%, so the property risk was being carried for no extra income at all. Prices adjust until that stops being true, and a flat year is what the adjustment looks like from outside.
Two other things get covered. That "REITs" spans two completely different businesses, equity REITs owning buildings and mortgage REITs owning leveraged property debt, and blending them produces a number describing nothing. And that the dispersion inside equity REITs is enormous, with health care up 28.5% while other property types fell. A data centre, a shopping mall, a nursing home and a forest share a tax structure and very little else.
One caution before you start. This is a single calendar year and it says nothing about the long run relationship between REITs and equities. Nareit publishes multi decade figures and those are the ones for that job. Both links sit at the bottom of the page.
The FTSE Nareit All Equity REITs index returned 2.3% in 2025 against 17.4% for the Russell 1000, a shortfall of over fifteen percentage points. But equity REITs yielded 4.07% against the S&P 500's 1.10%, roughly four times as much income. Within REITs the dispersion was extreme: health care returned 28.5% while office and self storage fell. Mortgage REITs, a different asset entirely, returned 16.0% and yielded 12.24%.
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