The FTSE Nareit All Equity REITs Index posted total returns of 4.7% in October, erasing some losses from the previous months and leaving the index up 13% for 2026 to date.
For the month, telecom REITs (which primarily invest in cellular network infrastructure) led the way, posting total returns up 18.4%. Lodging REITs also had a month of double-digit positive total returns, up 14.3%. Overall, almost every property sector ended the month in positive territory.
Lodging/resorts REITs (up 57.3%), Specialty REITs (up 33.5%) and data centers (up 32.8%) have been the top-performing property sectors in 2026. Residential (down 1.8%) is the only property sector in negative territory for the year.
Wealth Management spoke with Ed Pierzak, senior vice president of research at Nareit and John Worth, executive vice president for research and investor outreach, about the returns and recent REIT capital-raising activity.
This interview has been edited for length and clarity.
Wealth Management: Where do things stand with REIT total returns?
John Worth: For the month, REIT total returns were up 4.7%. That’s a nice bounce back from negative returns in August and September, which were a reflection of higher interest rates. That came amid the S&P 500 falling 0.9% and the Nasdaq Composite dropping 5.4%.
The big winner this month was telecommunications. They’ve been buoyed by SpaceX’s announcements that they intend to build out their own cellular network. This has been an interesting case. When that was first announced, cell tower REIT share prices reacted negatively because people thought SpaceX’s network would be satellite-based.
But the physics and the economics are clear. If you want a full network, you need terrestrial towers. So as the market processed that, it resulted in a nice push for telecom.
Beyond that, lodging continued to perform well. Self-storage had a strong month. And both residential and retail outperformed the broader REIT index.
WM: With two months left, where do REITs stand for 2026 as a whole?
JW: REITs have had a nice recovery, up 13% year-to-date, which is slightly ahead of the S&P 500.
For the year, lodging, specialty REITs, data centers and healthcare have all continued to show a lot of strength.
The most interesting story for the month was telecom. It is a sector that had lagged the index on a year-to-date basis, and the question before the SpaceX news was what would provide the impetus for new demand. Having a new mobile carrier will be good for the mix.
The continued strength of lodging has also been an interesting story this year. And data centers, while only up slightly for October, are up about 30% year-to-date, showing interest.
WM: Can we drill down into telecom REITs a bit more? It’s a sector that doesn’t get discussed as much. From an operational standpoint, this is owning both freestanding towers and towers on top of other buildings, right?
JW: Yes, it’s the full range. It’s the standalone towers you see when you’re driving down roads. REITs also have leases on rooftops where they have constructed towers in urban environments. Altogether, REITs own nearly 100,000 cellphone towers. They are the dominant owners in the U.S. among the different REITs that participate in the market.
That gives them the ability to have that network effect. Having one cellphone tower might be nice, but you need a network of them. So, when carriers are going to put together networks, REITs offer a broad range of geographies and tower types.
That’s made telecom REITs very attractive to institutional investors. When we talk about “completion strategies,” a number of institutions have wanted investment in cellphone towers because of the digital economy and increased use of mobile devices. And telecom is something that rarely sits in a private real estate portfolio. REITs provide that access.
WM: And with this potential SpaceX demand, would that be accomplished with adding equipment to existing towers or potentially also building new ones?
JW: Because the towers are owned by REITs as third parties, they can have equipment from multiple carriers. With a SpaceX buildout, we would see some densification of existing towers, but it also might drive demand for new buildouts as well. Overall, you see the occupancy rate rise.
One of the great things about telecom REITs owning the systems is that you go back, cell towers were originally built and owned by the cellphone companies themselves. But because they were proprietary, you could end up with separate towers in the same areas for different companies. Having REITs own the towers as third parties has helped with efficiency and helped with competitiveness between the carriers.
If all the towers were owned by the carriers, it would be difficult for new entrants. Instead, they can rent tower space and it creates a more vibrant and competitive environment.
WM: Pivoting to another topic, Nareit recently examined how REITs have approached capital markets in recent months amid the spike in rates. What do you find?
Ed Pierzak: Today, the 10-year Treasury is standing at roughly 5%. When we see this kind of rise in interest rates, a lot of real estate investors get anxious. That anxiety stems from worries about performance and uncertainty, and it’s almost as if higher rates equate to dire situations.
However, we know from past research that high interest rates do not equate to a dire situation. REITs do well across low, mid and high interest rate environments. By calendar-year metrics, REITs have outperformed private real estate in all of those scenarios.
In terms of fear or uncertainty, VIX is the fear gauge for the equity market, and while there’s no set rule, you get market turbulence when it’s generally above 30. The VIX today is well below that and is in what would be considered a “normal” or “optimistic” level. So, despite this talk of uncertainty, as far as equity markets are concerned, there isn’t elevated fear.
The MOVE index is the fear gauge for bond markets. Historically, extreme market stress is recognized when the index is at 150. It’s well below that and ver much showing that as far as bond markets are concerned, it’s a normal environment.
WM: What about the capital raising activity of REITs themselves?
EP: During the third quarter, REITs behaved rationally. There’s been the rise in rates and issuance costs, but the spreads over rates are still attractive at around 110 basis points. In September, with the 10-year at 5%, the average rate for REITs was 6.1%.
We also saw that over the three months, REITs issued less debt as rates rose. They are doing exactly what they should be doing. They are issuing less, but as they need to access the market, they have been doing so at a fair rate.
WM: A point you’ve made in our past discussions is that because of how REITs have managed their balance sheets, they are also not being forced to raise capital in less attractive market conditions. They have the ability to be flexible and opportunistic. So, that would seem to be borne out by what happened in the quarter, with REIT debt raising slowing a bit as rates rose.
EP: They are exercising that discipline and its benefited them.
JW: That’s the key piece that gets captured in Ed’s analysis. If you look at the quarter compared with the third quarter in 2025, the volume is about the same. However, in 2026 most of the activity was in July and early August, before the recent uptick, indicating that ability to flexible and opportunistic about when they go to the market.
