One boat the rising tide of optimism is failing to lift

While a rising tide of optimism has lifted most boats in the US stock market so far this year, real estate is the notable exception. That may change if, as we anticipate, the 10-year Treasury yield drops back a bit further from a roughly four-month high of more than 4.4%. Even so, we doubt US equity REITs, which account for the lion’s share of the real estate sector, will outperform the broader US stock market between now and end-2025 amid growing hype around AI and ongoing headwinds facing the US commercial real estate market.