Publicly traded U.S. real estate investment trusts raised $84.7 billion in 2024, the most in three years, signaling a larger appetite for property acquisitions.
While the additional capital raised last year did little to boost purchases — largely because selling kept pace with buying — the trade group Nareit and other REIT industry watchers are projecting increased transaction activity in 2025. The market saw a boost in deals in 2022 after REITs pulled in a record $133.6 billion the year before, according to Nareit.
The debt and equity capital raising results, $23 billion more than in 2023, comes as REIT share prices rose on average about 5% last year.
On balance, 2024 was successful for REITs, according to Nareit. The industry has weathered two years of high interest rates while maintaining access to capital markets, a crucial factor in keeping transactions flowing.
“In 2025, there is a real possibility for an environment with both moderating interest rates and robust economic growth, otherwise known as an economic soft landing,” John Worth, executive vice president for research, said in Nareit's outlook for 2025. “Nevertheless, there are both lingering and emerging risks, including soft property fundamentals in some sectors, higher interest rates reflecting fiscal imbalances, and the possibility that shifting tariff policies could restrain commercial real estate performance in 2025.”
Still, for the new year REITs are expected to increase their property purchases. In 2025, the real estate cycle will transition from a recession phase during the past three years to the recovery phase, according to Hoya Capital Real Estate, an exchange-traded funds issuer and REIT research firm.
‘Potential rebound’
Rising interest rates have pressured REIT performance, according to Leo Nelissen, an analyst and contributor to Hoya Capital’s research. Current valuations present attractive opportunities, especially in sectors such as data centers, telecommunications, and warehousing, he said in a report.
“REITs remain financially robust with low leverage and strong access to capital, positioning them well for a potential rebound,” he noted.
Last year, public REITs acquired $21.7 billion in properties currently tracked by CoStar. The number could rise as additional fourth-quarter deals are reported. That volume topped 2023 acquisitions by $1.4 billion.
The average acquisition volume in the past two years of $21.7 billion is less half the average volume of $61.8 billion in acquisitions by public REITs from 2020 to 2022, according to CoStar data. In 2022, REITs completed $89.6 billion in acquisitions — $24 billion more than in 2021.
“In 2025, we are cautiously optimistic that we will see a more robust [commercial real estate] market with more transaction activity,” Worth said. “These transactions will provide REITs with opportunities for accretive growth, particularly given that REITs will continue to have access to various capital sources.”
Public REITs sold $21.7 billion worth of properties in 2024 resulting in a no net gain in property holdings, CoStar data shows.
Typically REIT holdings increase year over year. The difference in 2024 was that REIT merger and acquisition activity was light. Their was only one such deal in 2024, according to Nareit, versus 11 in 2023: In April, Blackstone acquired Apartment Income REIT in a $10 billion deal.
The average disposition volume in the past two years of $20.5 billion is less half the average volume of $44.6 billion in dispositions by public REITs from 2020 to 2022, according to CoStar.