REITs Extend Strong Operating Performance

WASHINGTON, D.C. (Aug. 17, 2026) - REITs posted record highs for funds from operations (FFO) and net operating income (NOI) in the second quarter while maintaining strong balance sheets, according to Nareit's REIT Industry Tracker released today. More than 70% of REITs reported year-over-year increases in FFO, while nearly 80% reported year-over-year increases in NOI.

"The strength we're seeing from the REIT industry isn't coming from one measure or sector. Across the board, REITs continue to generate strong income from their properties reflecting rising occupancy while maintaining robust balance sheets," said John Worth, EVP of Research & Investor Outreach at Nareit. "That combination speaks to the underlying resilience of the industry amid ongoing economic uncertainty."

REIT Earnings and Property Income Continue to Reach Record Highs

The REIT Industry Tracker data show that FFO reached $22.4 billion-a 12.4% year-over-year increase. Meanwhile, NOI reached $32.7 billion, which is 6.8% higher than last year. In addition, same-store NOI experienced a 4.1% year-over-year gain, demonstrating that REIT operations outpaced inflation in the second quarter, which was 3.5%.

Solid Occupancy Reflects Continued Demand

Occupancy of total REIT-owned properties was 93.8%, according to the REIT Industry Tracker. The top five sectors with the highest occupancy rates were gaming (100%), specialty (99.1%), retail (97.3%), diversified (96.3%), and apartments (95.8%). Notably, the office sector had the largest increase in occupancy; it was up 2.8 percentage points year over year, reaching 88% in the second quarter.

"What stands out in the occupancy data is the strength of fundamentals across the REIT industry," said Edward Pierzak, SVP of Research at Nareit. "From retail and apartments to industrial and self-storage, high occupancy rates demonstrate that supply-demand dynamics remain solid across a wide range of property types."

Strong Balance Sheets Give REITs Future Opportunities for Growth

REITs continue to operate from a position of financial strength with robust balance sheets, characterized by well-structured debt; about 83% of REITs' total debt was unsecured, while approximately 90% of listed REITs' total debt was at a fixed rate. In addition:

• Leverage ratios were low with debt-to-market assets at about 34%.
• Weighted average interest on total debt: 2%
• Weighted average term to maturity of REIT debt was a little less than 6 years.

This balance sheet strength is more important than ever because it is giving REITs both the flexibility to navigate ongoing uncertainty and the ability to pursue accretive growth opportunities as transaction activity continues to increase.

For more data on:

• REITs' operational fundamentals, read the complete Q2 2026 REIT Industry Tracker.
• REITs' performance during the Middle East conflict, read Nareit's market commentary.
• REITs' mid-year performance, read Nareit's 2026 Mid-Year Update

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