78 REITs Raise Funds-from-Operations Forecasts in Third-Quarter Earnings Season
Key Facts
Seventy-eight real estate investment trusts, representing 80% of the sector, raised their annual funds-from-operations (FFO) forecasts during the third-quarter 2026 earnings season, according to a Seeking Alpha review that described it as one of the strongest earnings seasons on record. The review covered about 150 reports, including equity and mortgage REITs and homebuilders. The breadth of forecast increases suggests that the improvement was not limited to one company, though the aggregate figures include different business models. Results from Simon Property Group and Regency Centers show how that played out in specific operating metrics and annual guidance. Simon increased its FFO forecast, while Regency raised the lower end of its annual guidance range.
Simon Property Group reported real estate funds from operations of $3.37 per diluted share in the third quarter, compared with $3.22 in the same period a year earlier, an annual increase of 4.7%. Net operating income at its domestic properties rose 6.6% during the quarter. On the strength of those results, the company raised its 2026 real estate funds-from-operations forecast to a range of $13.30 to $13.40 per diluted share. The new range is $0.10 per share above its previous estimate. The update combines third-quarter growth in the operating metric with a higher estimate of what the company may earn over the full year.
In the shopping-center sector, Regency Centers raised its 2026 Nareit funds-from-operations forecast range to $4.86–$4.88 per diluted share, from $4.84–$4.88 previously. The company said it signed new and comparable renewal leases in the third quarter covering about 1.7 million square feet. The blended cash rent spread was 11.9%, while the spread on a straight-line rent basis reached 21.8%. These metrics indicate the rents achieved on new and renewed leases compared with comparable leases. Chief Executive Lisa Palmer said the company’s performance and confidence in the durability of its business enabled it to raise its annual forecast again and increase cash dividends on common shares.
On operating factors, Seeking Alpha linked improved rents, occupancy and leasing economics to a decline in new construction. It said post-election expectations for tighter permitting could benefit existing landlords, particularly in data-center properties. This places the supply side among the factors explaining improved sector metrics, alongside figures reported by companies in their results. Financing conditions, however, remained a headwind for real estate shares; Nareit said the 10-year U.S. Treasury yield closed September at 5.27%, up from 4.18% at the end of 2025. That means positive operating news came while higher yields remained a factor influencing the market.
Nareit data showed the FTSE Nareit All Equity REITs index fell 5.7% in September 2026, compared with a 0.6% decline in the Russell 1000. From the start of the year through the end of September, the equity REIT index returned 7.9%, compared with 12.3% for the Russell 1000. This comparison puts the earnings-season results in the context of weaker market performance than broader equities over the two periods cited. In operating results, total funds from operations for publicly traded U.S. equity REITs reached $22.4 billion in the second quarter of 2026, up 12.4% year over year, while net operating income rose 6.8% to $32.7 billion. These earlier quarterly figures provide context for the operating metrics reported in third-quarter results, while companies’ annual updates remain the direct measure of changes to their forecasts.