Office Rebound Expected in 2025 While Other Real Estate Stocks to See Trouble
- Once out-of-favor office REITs are rallying and can keep going
- High-flying homebuilding stocks will face challenges in 2025
There’s growing optimism in one of the most beaten-down corners of the market: office real estate investment trusts.
Photographer: Amir Hamja/BloombergThis article is for subscribers only.
It’s been a challenging couple of years for real estate stocks since the Federal Reserve started raising interest rates in 2022, as borrowing costs soared and the property market collapsed. And despite a healthy rebound in the middle of 2024, the outlook for 2025 isn’t particularly encouraging.
But that doesn’t mean investors should expect a sea of red in real estate shares next year. Rather, it will likely be a stock-picker’s market, where some rise, some fall, and the group doesn’t move in unison, according to Adam White, senior equity analyst at Truist Advisory Services.