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Among public real estate investment trusts, mortgage firms won 2025.
The FTSE Nareit Mortgage REITs Index, which covers 32 public REITs, ended last year up 16 percent, according to Nareit, a REIT industry organization.
Residential mortgages fueled the rise, likely buoyed by three interest-rate cuts at the back end of the year. For instance, one mortgage REIT, New York-based MFA Financial, saw its total returns rise by nearly 6 percent last year. Overall, the total returns for mortgage REITs were up by more than 26 percent for the year, according to Nareit.
These figures far outpaced equity REITs. The FTSE Nareit All Equity REITs Index, which covers 133 firms, ended 2025 with its total returns up just 2.3 percent.
However the broader U.S. stock market outpaced both mortgage and equity REITs. Total returns for the S&P 500 rose 17.9 percent, and the Dow Jones U.S. Total Stock Market saw total returns of 17.1 percent for 2025.
Among equity REITs, the top-performing sector in 2025 was health care, as those REITs had total returns of 28.5 percent last year. Second place went to the industrial sector, with total returns of 17 percent.
On the other hand, the worst-performing REIT sector was data centers, whose total returns plunged by more than 14 percent in 2025. The office sector — which experienced some improvements over the past year — also continued to struggle. The total returns for office REITs were down by 14 percent for the year.
While residential financing REITs excelled last year, the same could not be said for commercial financing firms. The total returns for these REITs fell 3.4 percent.
Claros Mortgage Trust, a New York-based commercial financing REIT that originates senior and subordinate loans, saw its total returns for 2025 decline by more than 32 percent.
However, at least one commercial mortgage REIT appeared to buck the trend: Blackstone Mortgage Trust, also based in New York, posted total returns of more than 21 percent in 2025.