REIT Earnings Season Winners Part II: Top Sectors and Stocks Leading the Rebound

Winner #1: Healthcare REITs

Healthcare: (Final Grade: A-)

Positives: Stellar senior housing trends continue in 2025, VTR & DOC dividend increases, limited incremental operator issues in skilled nursing, MPW survives another day as hospital operators stabilize.

Negatives: Mildly disappointing MOB results, lethargic lab space fundamentals, SNF policy uncertainty, CHCT's unresolved tenant issue.

• FFO Guidance: 6 Beat, 3 Meet, 0 Miss | 2025 Growth: +4.7%
• Top Performer: Medical Properties (MPW)
• Worst Performer: Community Healthcare (CHCT)

Our Picks: Sabra (SBRA), Alexandria (ARE), Global Medical (GMRE)

Winner #2: Industrial REITs

Industrial: (Final Grade: A-)

Positives: Post-election demand rebound despite (or because of) tariff uncertainty, encouraging 2025 outlook for moderating supply growth by mid-year, strength in Sunbelt markets, recovery in cold-storage margins.

Negatives: Ongoing weakness in Southern California, market rents remain negative nationally, moderating rent spreads after record-setting increases.

• FFO Guidance: 5 Beat, 4 Meet, 1 Miss | 2025 Growth: +5.4%
• Top Performer: EastGroup (EGP)
• Worst Performer: Americold (COLD)

Picks: EastGroup (EGP), STAG (STAG), Plymouth (PLYM)

Winner #3: Net Lease REITs

Net Lease: (Final Grade: B+)

Positives: Impressive FFO beats - especially PSTL, healthy but disciplined acquisition activity, WPC's return to growth, positive commentary on retail credit, added lift from sharp retreat in benchmark interest rates.

Negatives: Modest cap rate compression, additional retail categories join the watch list (car washes, following Zips bankruptcy).

• FFO Guidance: 8 Beat, 1 Meet, 2 Miss | 2025 Growth: +2.3%
• Top Performer: WP Carey (WPC)
• Worst Performer: FrontView REIT (FVR)

Our Picks: Realty Income (O), WP Carey (WPC), Netstreit (NTST), Broadstone (BNL), Getty Realty (GTY)

Winner #4: Casino REITs

Casino: (Final Grade: B+)

Positives: Tenant operators remain healthy, Steady-but-modest FFO and dividend growth, GLPI dipping toes into tribal casino market, VICI credit rating upgrade by Moody's - now investment grade across all three.

Negatives: Limited M&A opportunities - especially for gaming assets, Vegas convention traffic and overall visitor volumes flat in 2024 vs. 2023.

• FFO Guidance: 2 Beat | 2025 Growth: +2.8%
• Top Performer: VICI Properties (VICI)
• Worst Performer: Gaming & Leisure Properties (GLPI)

Our Picks: Gaming & Leisure (GLPI), VICI Properties (VICI)

Winner #5: Mall REITs

Mall: (Final Grade: B+)

Positives: Strong leasing despite retailer bankruptcies, Simon's dividend hike to pre-pandemic levels, positive FFO outlook for 2025, Occupancy rate recovers to pre-pandemic levels.

Negatives: Flat tenant sales & foot traffic, Concern on spending health of European & lower-end American consumer, Disappointing results from MAC.

• FFO Guidance: 3 Beat | 2025 Growth: +3.6%
• Top Performer: CBL Properties (CBL)
• Worst Performer: Macerich (MAC)

Our Picks: Simon Property (SPG)

Winner #6: Strip Center REITs

Strip Centers: (Final Grade: B+)

Positives: Renewal spreads and occupancy rates post fresh record-highs, little apparent slowdown in leasing activity, Outlook implies similar favorable FFO and NOI growth trends in 2025 as in 2024.

Negatives: Less bullish retail commentary amid recent uptick in store closings, KRG's slowdown after sector-leading pandemic-era growth.

• FFO Guidance: 7 Beat, 3 Meet, 1 Miss | 2025 Growth: +3.9%
• Top Performer: Regency Centers (REG)
• Worst Performer: Site Centers (SITC)

Our Picks: Kite Realty (KRG), CTO Realty (CTO), Brixmor (BRX)

Winner #7: Apartment REITs

Apartment: (Final Grade: B+)

Positives: Buoyant renewal rent growth, record-low turnover helping to control expenses, healthy occupancy despite record supply growth, Commentary indicates mild reacceleration in rent growth in early 2025.

Negatives: Weak new lease rates amid peaking multifamily supply, FFO growth resumes in 2026, limited appetite for external growth.

• FFO Guidance: 5 Beat, 5 Meet, 1 Miss | 2025 Growth: +0.2%
• Top Performer: Mid-America (MAA)
• Worst Performer: AvalonBay (AVB)

Our Picks: Centerspace (CSR), Independence (IRT), Mid-America (MAA)

Winner #8: Farmland & Timber REITs

Farmland & Timber: (Final Grade: B)

Positives: Tariff uplift for lumber and crop prices, Strong performance in Row Crop (corn, soybeans, cotton, wheat), FPI's steady FFO outlook despite selling 1/3 of its portfolio in 2025, WY's dividend hike.

Negatives: Weaker performance in Permanent Crops (fruits, vegetables, nuts), Lingering tenant issues in these permanent crop farms.

• Top Performer: Gladstone Land (LAND)
• Worst Performer: Farmland Properties (FPI)

Our Picks: Gladstone Land (LAND)

Winner #9: Residential Mortgage REITs

Residential mREITs: (Final Grade: B)

Positives: Decent results given harsh macro backdrop, positive dividend commentary - including an increase from Dynex, upbeat outlook on incremental return on equity potential given wide spreads.

Negatives: Results from several mREITs - CIM, AOMR, ARR - underscore the potential Book Value impact of volatile interest rates.

Our Picks: Rithm Capital (RITM)

Quick Recap: Winners of Earnings Season

Healthcare REITs were the leaders this earnings season, as results showed robust momentum in senior housing fundamentals while tenant operator issues improved across other healthcare sub-sectors. Industrial REITs were also upside standouts, buoyed by a broader tariff uplift across the "goods-side" of the real estate sector, including Farmland and Timber REITs. Results from Net Lease, Casino, and Residential Mortgage REITs - several of the most rate-sensitive sectors - were also surprisingly steady despite the turbulence in late 2024.

Retail REITs were winners as well, with strip center and mall REITs reporting another quarter of near-record occupancy rates and rent growth, pushing back on concern over a sudden surge in retail bankruptcies. Apartment results were also encouraging, as record-low turnover helped to control expenses and maintain occupancy despite peaking supply growth.

As noted in our Earnings Scorecard, dividend news was a notable positive highlight of REIT earnings season, with 29 REITs raising their dividends this year - slightly ahead of last year's pacing. Among individual names, some of the most trouble REITs led the gains this earnings season - notably Medical Properties (MPW), Hudson Pacific (HPP), and Blackstone Mortgage (BXMT) - while we've seen notably strong performance from several industry heavyweights - WP Carey (WPC), American Tower (AMT), Sun Communities (SUI), and Prologis (PLD) - all of which had fallen on tougher times over the past two years.

Stay tuned for Part 3 of our Earnings Recap - Losers of REIT Earnings Season, where we'll focus on sector-level underperformance from Commercial Mortgage REITs, Hotel REITs, Office REITs, and Self-Storage REITs, and note the handful of downside surprises in an otherwise very strong REIT earnings season.

About the Author

David Auerbach boasts over two decades of experience in the securities industry, specializing as an institutional trader with a focus on Real Estate Investment Trusts (REITs), Equity and Preferred stocks, MLPs, ETFs, and Closed End Funds.

Based in Dallas, TX throughout his entire career, David currently serves as the Chief Investment Officer for Hoya Capital, managing the Hoya Housing 100 ETF (Ticker: HOMZ) and The High Yield Dividend ETF (Ticker: RIET). Previously, David held the position of Managing Director at Armada ETF Advisors, the sub-advisor for the Residential REIT ETF (Ticker: HAUS) and The Private Real Estate Strategy via Liquid REITs ETF (Ticker: PRVT).

Additionally, he acts as a consultant with IRRealized, LLC, focusing on corporate access in the REIT industry. David's industry journey includes roles at World Equity Group, Esposito Securities, and Green Street Advisors where he got his start in the REIT industry.

At Esposito Securities, he played a crucial role in building the REIT/Real Estate platform and worked extensively with institutional investors, Equity REITs, and ETF issuers.

Throughout his career, David has been quoted by reputable publications such as Bloomberg, WSJ, Financial Times, REIT.com, and GlobeSt.com. He has also made notable appearances as a featured guest on networks like Yahoo Finance, TD Ameritrade, and Bloomberg.

David holds a BBA in Finance from the University of Texas at Austin (May 1999) and an MBA in Finance from Southern Methodist University (May 2005). He maintains FINRA Series 7, 24, 55, and 63 registrations.

In his leisure time, David is an avid traveler, often found crisscrossing the country in pursuit of attending as many Phish concerts as possible.

Disclaimer

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.