U.S. REITs Rebound as Low Rates and Rental Demand Drive Recovery

Real Estate Investment Trusts (REITs) in the United States are witnessing renewed investor interest as low interest rates and strong rental demand support a post-pandemic recovery in the sector. Since April 2025, the total REIT market capitalization has grown by 6.5%, bringing valuations closer to pre-2020 levels.

The rebound is being led by key segments such as suburban office parks, logistics centers, and residential micro-units. Suburban commercial assets have reached occupancy levels exceeding 90%, as hybrid work arrangements accelerate decentralization away from urban office cores.

Logistics REITs are experiencing sustained momentum, driven by heightened demand for e-commerce distribution and AI-powered warehousing. Data center REITs are also outperforming, fueled by ongoing expansion in cloud infrastructure and AI model training capacity.

Investors are increasingly evaluating REITs based on lease duration and inflation-adjusted rent clauses. Properties with long-term agreements and CPI-linked contracts are proving especially attractive in today’s lower-rate environment.

Nonetheless, concerns remain around debt servicing risks in the event of interest rate hikes. Despite this, analysts note that REITs continue to offer compelling yields and sector-specific growth opportunities, particularly in a market environment that favors real assets over speculative instruments.