The Trump administration may have unintentionally thrown a bone to the real estate investment trust (REIT) industry. President Trump’s nomination of Kevin Warsh to be the next chair of the Federal Reserve provides more clarity, and more importantly, predictability to the course of rate cuts in 2026.
Why is that important to REITs? The structure of these businesses certainly benefits from lower interest rates. However, what they need more than rate cuts is rate predictability. It’s why many REITs got hit so hard in 2022 and 2023. It wasn’t just "higher for longer"—it was the lack of clarity on when rate increases would finally stop.
The nomination of Warsh would seem to indicate that one or two rate cuts may happen in 2026. But it’s unlikely that investors will see a big move in either direction.
With that backdrop, there are two REITs that look promising. Both cater to a specific kind of consumer, and both just reported solid earnings on Feb. 2.
Simon Property Group: A Temperature Check on the High-End Consumer
It’s fair to say that Simon Property Group Inc. (NYSE: SPG) has properties that cater to the ascending leg of the current “K-shaped” economy. So, the company’s results may not be reflective of the whole consumer market, but they do suggest that consumers with the means to do so continue to spend. More importantly, they’re willing to shop at brick-and-mortar locations.
That’s the takeaway from the company’s fourth-quarter earnings report.
Simon closed 2025 with record real estate funds from operation (FFO), mid-single-digit growth in domestic property net operating income (NOI), and U.S. mall and outlet occupancy in the mid-90% range.
Simon isn’t taking defensive actions. The company managed to raise rents in an environment where sales per square foot are higher YOY, and the company executed a significant volume of new and renewal leases without resorting to giveaways.
That’s not the performance of a company that’s seeing a consumer under pressure.
Investors should also note that Simon continues to invest capital in redevelopments, selectively acquiring high‑quality retail assets, and returning billions of dollars to shareholders through dividends and buybacks. That capital allocation stance only makes sense if management believes the cash flows from its core properties are durable even in a world where the Fed delivers fewer cuts than the market once hoped.
Healthpeak Properties: A Wellness Check on a Different Consumer
Healthpeak Properties Inc. (NYSE: DOC) is a REIT that specializes in properties that cater to the healthcare industry, including life science research facilities, medical office buildings and senior housing communities. The company’s latest earnings report showed that the latter is where its growth is coming from.
It makes sense. The aging of America has been a story for much of the last decade, and it’s continuing to gain steam.
Healthpeak reported that outpatient medical retained a large majority of expiring tenants and rolled leases at positive cash spreads, pointing to healthy demand from health systems and physician groups even as those systems wrestle with labor and reimbursement pressure.
Senior housing and life plan communities posted double‑digit cash NOI growth on the back of rising occupancy and strong entry‑fee collections.
This reflects both demographics and some post‑pandemic catch‑up.
Healthpeak is also preparing a dedicated senior housing REIT IPO, Janus Living, to unlock value that the public market hasn’t fully recognized. That mix of pruning and repositioning is exactly what you would expect in a sector where the underlying demand is durable while capital markets have been choppy.
A Barbell Strategy May Be the Way to Gain Exposure
Reinforcing the idea that 2026 may be a comeback year for REITs, both SPG and DOC stock are up about 2% year-to-date. However, Simon Property is trading at the high end of its 52-week range, whereas Healthpeak is trading near the low end of its 52-week range.
Not surprisingly, analysts give DOC a more bullish short-term outlook. And while both REITs have attractive dividend yields, Healthpeak’s dividend yield as of this writing is an impressive 7.37%.
That said, Simon has been the better performer over the last five years. Plus, in the last 30 days as of this writing, analyst sentiment has been bullish on SPG, with several firms setting price targets above consensus.
This could make a barbell strategy the right play with these two REITs. A barbell between SPG‑type retail and DOC‑type healthcare lets investors bet on both how people spend and how they seek care, without going “all in” on either story. With SPG, you’re leaning into the higher‑beta upside. If retail headwinds are overstated and rate volatility eases, you get operating leverage from rising sales and rents, plus the chance for multiple expansion as sentiment toward malls improves.
On the DOC side, you’re buying visibility. Outpatient medical, senior housing, and related healthcare assets tend to grow cash flows steadily on the back of demographics and policy, even if the economy downshifts. That leg probably won’t rip higher in a bull market, but it can help cushion the portfolio if the consumer blinks.
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The article "2 REITs That Look Attractive in a Stable Rate Environment" first appeared on MarketBeat.
