After two years of underperformance, commercial real estate investment trusts are attracting renewed investor interest. Office REITs in particular are showing signs of recovery as companies finalize their hybrid work policies.
The FTSE Nareit Office REIT Index has gained 18% over the past three months, outperforming the broader market. Analysts attribute the rally to stabilizing occupancy rates and attractive dividend yields averaging 5.8%.
Boston Properties, one of the largest office REITs, reported increased leasing activity in its premium properties. "We are seeing strong demand for high-quality, amenity-rich office spaces," said CEO Owen Thomas. "The flight to quality is real."
Industrial REITs continue to benefit from e-commerce growth, while data center REITs are riding the AI infrastructure wave. Equinix and Digital Realty have announced major expansion plans to meet surging demand for AI computing capacity.
Retail REITs remain mixed, with outlet centers and grocery-anchored properties outperforming traditional malls. Simon Property Group has successfully repositioned several properties with entertainment and dining tenants.
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