Americas Real Estate REITs Rates move, REITs do what A look across performance and correlations, refreshing into an elevat...

Equity Research 18 September 2026 | 12:45PM EDT

Rates move, REITs do what? A look across performance and correlations, refreshing into an elevated environment

As interest rates move and inflation increases, investors often ask how REITs are likely Caitlin Burrows | to perform. To address this, we take another look across periods of increasing and Goldman Sachs & Co. LLC decreasing interest rates: (1) REIT performance relative to the S&P 500, (2) Subsector Julien Blouin performance by REIT versus the REIT benchmark on a total return basis, (3) REIT | share price correlations with 10 YR Treasury yield and CPI, and (4) monthly Goldman Sachs & Co. LLC transaction volume relative to 10 YR Treasury yield and cap rates. Key takeaways Harrison Slater, CFA | include: Goldman Sachs & Co. LLC

n Rolling six month periods on a property type basis show more consistent Jeremy Kuhl | rate sensitivity: During rolling six-month periods in which the 10 YR Treasury Goldman Sachs & Co. LLC

yield increased by at least 40bps, REITs have underperformed the S&P 500 by a Ryan Treais | median of 6.7% since 2006. During rolling six-month periods in which the 10 YR Goldman Sachs & Co. LLC

Treasury yield decreased by at least 40bps, REITs have outperformed the S&P Shailee Lnu | 500 by a median of 1.6% since 2006. The differences by subsector are more Goldman Sachs India SPL pronounced. Shikhar Gupta | n REITs are more sensitive to interest rates than inflation: Over the past five Goldman Sachs India SPL years, most REITs have shown a negative correlation with the 10 YR Treasury yield, particularly long-lease sectors such as net lease and office, underscoring how higher rates weigh on valuations and financing costs. n Transaction volumes are weakly/inversely related to interest rates, and the gap between the 10 YR Treasury yield and cap rates remains tight: On a TTM basis, transaction volumes moved lower as the 10 YR Treasury yield rose. However, recently, despite the 10 YR Treasury yield rising, cap rates have remained rather stable.

Bottom line: Interest rates impact REIT price performance and the impact varies by subsector; however we believe earnings growth rather than interest rates has a larger impact on REIT performance (but acknowledge interest rates can also impact earnings growth directly and indirectly). We make the case that higher rates could prolong the favorable operating backdrop for senior housing REITs (VTR, NHP, JAN), and also highlight attractive fundamentals for LINE & BRX irrespective of interest rates.

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Goldman Sachs Americas Real Estate: REITs

with private real estate companies across each of: Single Family Rental, Industrial/Logistics, Sr. Housing, Retail, and Apartments. We are interested to here their take on property fundamentals, including the impact of interest rates on their business and the property types. See here for details and registration.