Public real estate markets may be setting up for a stronger year ahead, according to a new report that could influence how advisors position REIT exposure for retail clients in the coming year.
Hazelview Investments’ 2026 Global Public Real Estate Outlook notes that after several years marked by rising interest rates, uneven economic growth and pressure on property valuations, conditions are shifting. The firm points to improving real estate fundamentals in key sectors, alongside public-market pricing that still reflects a high degree of investor caution. That disconnect, the report suggests, may be creating opportunities for investors willing to re-engage with listed real estate.
For financial advisors, the language around “compelling valuations” will stand out. Publicly traded real estate securities have spent much of the past two years trading at discounts to their underlying asset values, largely due to higher borrowing costs and uncertainty around property pricing. If those headwinds begin to stabilize, discounted REIT valuations could offer long-term investors an attractive entry point — particularly those seeking income and portfolio diversification.
Retail investors have historically used REITs for yield, but Hazelview’s report suggests a broader opportunity may be developing. As supply constraints persist in certain property types and demand drivers strengthen in others, not all real estate segments are expected to move in lockstep. This reinforces a message advisors have increasingly delivered to clients: sector selection matters, and broad index exposure may not capture the best opportunities.
The report’s emphasis on an active management lens is also notable. Passive REIT products have grown in popularity with retail investors, but volatile interest-rate expectations and uneven regional recoveries could make index-only exposure less predictable. Hazelview’s approach implies that identifying mispriced securities, rotating among property types and adjusting geographic exposure could be key to generating stronger risk-adjusted returns.
For advisors constructing client portfolios, the report provides support for revisiting real estate allocations after a period when many investors reduced exposure. It also offers a framework for client conversations — positioning listed real estate not simply as a yield instrument, but as a sector where valuation discipline and structural demand trends may drive performance.
Risks remain though as borrowing costs are still higher than in the pre-2022 era, refinancing schedules remain a concern for certain property owners, and economic growth forecasts are mixed across regions. Those uncertainties mean public real estate may continue to experience bouts of volatility. However, Hazelview’s outlook suggests that much of that risk is already reflected in market pricing.
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