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Real estate investment trusts (REITs) have recently generated better returns than the S&P 500—a trend UBS analysts believe will continue.
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Real estate may be better-insulated from tariffs than other industries represented in the benchmark stock index, UBS analysts wrote in a note Wednesday.
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REITs with triple net leases and those that lease single-family homes will likely remain stable, the analysts said.
Real estate investment trusts (REITs) have outperformed the broader market and could maintain their edge in an uncertain economic environment, UBS analysts said Wednesday.
REITs—companies that own, operate, or finance income-generating real estate—generated returns about 4 percentage points greater than the S&P 500 index in 2025 through Monday’s close, according to a UBS analysis.
REITs began pulling ahead of the benchmark stock index around March 4, when the Trump administration imposed tariffs on goods from Canada and Mexico and raised import taxes on products from China, UBS said in a research note. REITs could also continue performing better than the broader market because real estate may be better-insulated from tariffs than other sectors represented in the S&P 500, the analysts said.
“This is due in part to the defensive nature of the group; they are backed by real assets, limited international exposure, and should see a delayed impact from tenants,” the note said.
It’s unclear how President Donald Trump’s trade policies will evolve. He announced on Wednesday a 90-day pause on at least some tariffs.
In such a volatile environment, REITs with self-storage facilities and triple net leases—where commercial tenants are responsible for property tax, insurance, and maintenance expenses—could be more stable choices than others, UBS said. Single-family rental homes, apartments on the coasts, and manufactured homes are also likely to be stable, the analysts said.
The prospect of tariffs and a consumer slowdown may hurt industrial tenants and sap demand for warehouse and cold storage space, UBS said. Shopping centers and other retail properties may also face headwinds, the analysts said.
REITs surged Wednesday, amid broader market gains after Trump announced a pause on some tariffs. Shares of UDR (UDR), which owns apartments, jumped about 8%, while shares of Extra Space Storage (EXR), which rents storage units, added over 7%. Shares of Equity LifeStyle Properties (ELS), which owns manufactured home communities and resorts, rose close to 4%. (Read Investopedia’s live coverage of Wednesday’s market action here.)
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