- The FTSE Nareit All Equity REITs Index lost 5.7% in September, versus a 0.6% decline for the Russell 1000 and 0.7% for the Dow Jones U.S. Total Stock Market.
- A quarter-point Fed rate hike pushed the 10-year Treasury yield to 5.27%, up from 4.18% at year-end 2025, and Nareit says the move hit REITs harder than broader equities.
- Lodging/resorts, data centers and specialty REITs lead year to date, while the All Equity index trails the broader market at 7.9% versus roughly 12.5%.
The FTSE Nareit All Equity REITs Index fell 5.7% in September, lagging the broader market as bond yields surged and the Federal Reserve tightened again, according to Nareit’s monthly REIT commentary. The Russell 1000 slipped 0.6%, and the Dow Jones U.S. Total Stock Market lost 0.7%.
The gap widened the year-to-date shortfall for listed real estate.
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Rates Take the Blame
The Fed raised the federal funds rate by 25 basis points to fight persistent inflation. The 10-year Treasury yield rose to 5.27%, a level Nareit says has not been seen in nearly 25 years, compared with 4.18% at the end of 2025.
Nareit says rising bond yields weigh on REITs more than on the broader stock market.
Year-to-Date Scorecard
Through September, the All Equity REITs Index returned 7.9%, trailing the Dow Jones U.S. Total Stock Market at 12.6% and the Russell 1000 at 12.3%.
Lodging/resorts REITs lead at 37.6% year to date, followed by data centers at 28.0% and specialty REITs at 23.4%.
Sector Breakdown
Lodging/resorts was the only sector to post a gain in September, rising 0.7%. Health care fell 3.4%, data centers dropped 3.8%, telecommunications slid 8.6% and gaming declined 8.5%.
Timberland was the weakest group at negative 15.5%.
Mortgage REITs Take the Brunt
The Mortgage REITs Index dropped 13.7% in September. Home financing REITs fell 13.7% and commercial financing REITs lost 13.8%, leaving the index down 12.4% year to date.
Mortgage REITs still carry a 15.68% dividend yield, versus 3.93% for All Equity REITs and 1.03% for the S&P 500.
Why It Matters
Public REIT pricing is often the first read on how investors value commercial property when rates move. The 5.27% yield is also feeding stress for borrowers, a theme CRE Daily covered when the 10-year Treasury yield put lenders on alert.
Mortgage REITs, which both lend against and hold CRE debt, are absorbing that pressure directly.
What’s Next
Watch whether yields hold above 5% and whether the Fed signals further hikes. Lodging and data centers have been the relative winners, while rate-sensitive financing REITs face the most exposure if yields keep climbing.
