The REIT and Equity Trust - Other industry faces pressure from higher-for-longer interest rates, bond yields and construction costs, which can increase refinancing expenses, constrain acquisitions and slow development. Aging properties, power constraints, health care tenant stress and life science oversupply may weaken occupancy, extend leasing periods and raise capital requirements.

Still, demand for modern assets remains healthy across health care, industrial, lodging, office and infrastructure markets. Restrained development pipelines can support well-positioned properties, while investment and balance sheets provide room for growth, benefiting names such as American Healthcare REIT (AHR Quick QuoteAHR - Free Report) , Terreno Realty Corporation (TRNO Quick QuoteTRNO - Free Report) and RLJ Lodging Trust (RLJ Quick QuoteRLJ - Free Report) .

About the Industry

The Zacks REIT and Equity Trust - Other industry includes REITs across a broad range of property types, such as industrial, office, lodging, healthcare, self-storage, data centers and infrastructure. Equity REITs generally own properties and lease space to tenants, earning revenues mainly through rental income. These REITs’ performance is closely linked to economic conditions since stronger business activity can support property demand, occupancy and landlords’ ability to raise rents. Results vary depending on the type of assets owned and where those properties are located. As business models evolve, real estate is becoming more connected to day-to-day operations, technology investment and the need for purpose-built space, making property quality, tenant demand and location increasingly important drivers of REIT performance. This can influence returns over time.

What's Shaping the Future of the REIT and Equity Trust - Other Industry?

Rate Hikes and Bond Yields Raise Pressure on REITs: The cost of capital is becoming a bigger factor in how REITs decide where to invest. Even where property demand remains firm, acquisitions, refinancing and new construction must work under tighter financing conditions. Higher-for-longer interest rates and the risk of renewed Fed rate hikes if inflation stays elevated can raise borrowing costs further and slow expansion. This is especially important for office, industrial, health care, life science, hotel and infrastructure assets that require substantial upfront capital. Higher borrowing and construction costs also leave less room for delays or weaker-than-expected leasing. The result is likely to be a more cautious approach to expansion. At the same time, higher bond yields can make fixed-income securities more competitive with REIT dividend yields, reducing the income appeal that traditionally attracts investors to the sector. 

Older Buildings and Some Property Types Bring Added Risks: Some property types are becoming harder to manage as buildings age and tenant requirements become more demanding. Industrial occupiers are increasingly favoring properties that can handle current logistics, production and distribution needs, leaving aging facilities less competitive and more expensive to reposition. Data centers are facing a different challenge since securing adequate power, equipment and supporting infrastructure can affect project timing and push development spending higher. Health care landlords must also account for financial strain among medical providers, while life science owners continue to work through an oversupply of laboratory space. These conditions can affect occupancy, extend leasing periods and increase capital needs. For REITs, broad sector demand may offer limited protection when individual properties are outdated, costly to improve or unable to meet changing technical, operational and regulatory requirements over time.

Modern, Useful Assets Are Gaining Ground Across REIT Sectors: Demand remains healthy for properties that play a direct role in how tenants operate. Modern industrial buildings that support manufacturing, logistics and distribution, together with medical facilities designed for outpatient care, continue to attract interest. Data centers remain important as businesses expand AI, cloud computing and other digital workloads. Higher-quality offices are also drawing companies seeking efficient space for collaboration, while hotels are benefiting from business travel, group events and corporate meetings. In several of these categories, a restrained development pipeline is helping well-positioned properties by limiting fresh competition. For REITs, this means building quality and usefulness are becoming more important than simply owning assets in a favored sector. Properties with modern features, dependable infrastructure and close ties to tenant operations are better positioned to support demand and income over time.

Zacks Industry Rank Indicates Bleak Prospects

The Zacks REIT and Equity Trust - Other industry is housed within the broader Finance sector. It carries a Zacks Industry Rank #156, which places it in the bottom 37% of 247 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dim near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of the southward revision of funds from operations (FFO) per share outlook for the constituent companies in aggregate. Looking at the aggregate FFO per share estimate revisions, it appears that analysts are losing confidence in this group’s growth potential of late. Over the past year, the industry’s FFO per share estimates for 2026 and 2027 have moved south 0.8% and 7.4%, respectively.

However, before we present a few stocks that you might want to consider for your portfolio, let’s take a look at the industry’s recent stock market performance and valuation picture.

Industry Lags Stock Market Performance

The REIT and Equity Trust - Other Industry has underperformed the S&P 500 composite and the broader Zacks Finance sector in a year.

The industry has risen 6.3% during this period compared with the S&P 500 composite’s growth of 15.2% and the broader Finance sector’s 7.1% rise.

One-Year Price Performance

Industry's Current Valuation

On the basis of the forward 12-month price-to-FFO ratio, which is a commonly used multiple for valuing REIT - Others, we see that the industry is currently trading at 15.61 compared with the S&P 500’s forward 12-month price-to-earnings (P/E) of 19.76. The industry is also trading below the Finance sector’s forward 12-month P/E of 16.27. This is shown in the chart below.

Forward 12 Month Price-to-FFO (P/FFO) Ratio

Over the last five years, the industry has traded as high as 22.23X and as low as 12.87X, with a median of 15.82X.

3 REIT and Equity Trust - Other Stocks to Buy

American Healthcare REIT: This is a fast-scaling healthcare REIT positioned at the center of powerful demand trends for senior housing operating properties (SHOP). Its diversified portfolio spans 327 campuses and properties, while higher-growth SHOP+ assets contributed 81.2% of pro-rata cash NOI in second-quarter 2026. This portfolio mix gives American Healthcare meaningful exposure to need-based care and operating upside over the coming decade. 

American Healthcare’s growth story is gaining momentum through strong execution, disciplined acquisitions and a rapidly strengthening balance sheet. Through Sept. 1, 2026, the company closed $2 billion of investments and built a $675 million-plus awarded pipeline. Second-quarter 2026 same-store NOI advanced 13.2%, SHOP same-store NOI surged 20.5%, and net debt-to-annualized adjusted EBITDA fell to 2.5X, creating substantial capacity for further accretive expansion and long-term shareholder value creation.

AHR currently carries a Zacks Rank #2 (Buy). The stock has rallied 7.5% over the past three months. The consensus mark for 2026 and 2027 FFO per share has been revised upward over the past 60 days and suggests an increase of 26.7% and 14.7%, respectively.  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Terreno Realty Corporation: This is an industrial REIT focused exclusively on six major coastal U.S. markets, targeting flexible, functional properties in dense infill locations where supply is constrained, and logistics demand is durable. As of June 30, 2026, its portfolio included 316 buildings spanning 20.6 million square feet, plus 46 improved-land parcels totaling 147 acres, with operating occupancy of 97.6%.

Terreno’s scarcity-driven portfolio, disciplined capital recycling and strong balance sheet create a compelling platform for sustained long-term value creation. Cash rents on new and renewed leases commencing in second quarter rose 27.7%, while average cash same-store NOI growth since IPO stands at 11%. Its momentum remains strong, and Moody’s assigned a Baa1 rating in June 2026.

TRNO currently carries a Zacks Rank #2. The stock has gained 1.1% over the past three months. The consensus mark for 2026 and 2027 FFO per share has been revised upward over the past 60 days and calls for a 2.2% and 7.6% increase year over year.  





RLJ Lodging Trust: This is a hotel REIT focused on premium-branded, high-margin properties across major U.S. urban and resort markets. Its geographically diversified portfolio includes 91 hotels and 20,438 rooms, with more than two-thirds of portfolio exposure concentrated in urban markets. RLJ’s mix of lifestyle, gateway, resort, and metro assets positions the company to capture demand from business, leisure, group and event-driven travel.

RLJ’s investment case is strengthened by multiple growth levers, including conversions, renovations, revenue initiatives and selective acquisitions. Second-quarter 2026 RevPAR increased 6.8%, while business transient revenues rose 10%, highlighting healthy demand momentum. Eight completed conversions are still ramping up, additional projects are scheduled for 2027, and approximately $1 billion of liquidity with no debt maturities until 2029 provides flexibility to fund growth and shareholder returns over the long term.

RLJ currently carries a Zacks Rank #2. The Zacks Consensus Estimate for 2026 FFO per share has been raised over the past 60 days, suggesting a 4.3% year-over-year increase. The stock has risen 41.5% over the past six months.



Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.