REITs’ Q1 Earnings Reports: What They Say About the CRE Trajectory Insights| LightBox

Real Estate Investment Trusts (REITs) showed their trademark resilience in Q1, holding steady through 10-year Treasury yield swings, volatility in the equities market, and shifting market dynamics. Still, their earnings reports offered little excitement—until a surprise catalyst hit the headlines. This week’s news of a 90-day U.S.-China tariff reduction sparked a broad stock market rally, giving REITs a much-needed boost. Industrial and lodging REITs led the charge, with the FTSE Nareit U.S. Industrial REIT Index jumping 4.9% and lodging/resort REITs climbing nearly 6%, signaling a renewed wave of investor optimism.

This positive momentum came on the heels of a challenging period marked by still-high interest rates and growing concerns of an economic slowdown in response to new tariff policies. Despite these headwinds, REITs have demonstrated remarkable adaptability. Of the 105 equity REITs that issued full-year Funds From Operations (FFO) guidance, 28% raised their outlook, 63% held steady, and just 9% lowered expectations, according to a comprehensive analysis by Hoya Capital—pointing to a broadly stable or improving outlook across the sector.

Notably, technology-focused REITs, including data centers and cell towers, exhibited strong performance, with several raising their full-year FFO guidance due to solid demand. Residential REITs reported reaccelerated rent growth in early 2025, reversing previously sluggish trends. Conversely, hotel REITs made up most of the downward guidance revisions, though the adjustments were relatively minor.

These recent developments reflect a consistent theme: strategic adaptability and strong positioning are defining today’s REIT landscape. Even in the face of ongoing macroeconomic headwinds, many REITs are finding ways to pivot, outperform, and capitalize on sector-specific tailwinds. As we break down earnings across each sector, a clearer picture emerges of how leadership, strategy, and market dynamics are shaping commercial real estate’s next chapter.

Office Sector: Signs of Stabilization Amid a Slow Rebuild

The office sector remains under pressure, but recent earnings from top REITs reveal a more layered narrative—one that highlights the strength of prime assets and strategic shifts to meet evolving tenant demands.

Boston Properties— one of the largest publicly traded office REITs in the U.S.—reported FFO of $1.64 per share, narrowly missing expectations. But the more telling metric was leasing volume: 1.1 million square feet, a 25% year-over-year increase. That momentum points to growing tenant demand for well-located, Class A office space, even as hybrid work continues to reshape long-term needs.
Several major development projects are also underway. These include the $456 million 290 Kohl’s multifamily project in Jersey City, expected to deliver initial units in early 2028, and the $2 billion 343 Madison Avenue office tower in Midtown Manhattan, set to break ground in 2025. Meanwhile, the 1050 Winter Street building in Waltham, MA—originally planned for life sciences—was fully pre-leased to a defense technology firm for a 15-year term, prompting a strategic pivot back to office use. The lease is expected to contribute to Q3 2025 earnings.
In the company’s core markets—Boston’s Back Bay and Midtown Manhattan—demand remains particularly strong. “Availability is sparse, rents are increasing, and concessions remain constant,” said President Doug Linde, adding that those two markets “continue to be the strongest in our portfolio.”
SL Green— the largest office REIT and landlord in Manhattan, reported 561,000 square feet of leasing, with activity concentrated in modern, amenitized buildings. While valuation pressures remain, the company reaffirmed its full-year guidance, signaling confidence in its ongoing repositioning and debt-reduction strategy.
On the earnings call, Chief Investment Officer Harrison Sitomer pointed to broader market tailwinds: “Our market is experiencing positive momentum as a result of a weaker U.S. dollar, demand for tangible assets, the reopened CMBS market we’ve seen since the beginning of this year, and the prospect of rate relief. All of that’s paired with a fundamental and sentiment recovery that’s really at a five-year high.”
Indeed, the CMBS market is showing renewed life. Year-to-date, $6.9 billion in office-backed transactions have closed—marking a notable rebound compared to the muted volumes of recent years.
Kilroy Realty—a major West Coast player, beat FFO expectations reported Q1 2025 FFO of $1.02 per diluted share, down from $1.11 in the same period a year earlier. While overall FFO declined, the company beat consensus estimates on net income and pointed to strong leasing momentum in select markets, particularly in San Francisco.
In a city where the artificial intelligence boom is driving renewed demand for office space, CEO Angela Aman expressed growing optimism, stating, “We’re very bullish about what we’re seeing in the city of San Francisco from a leasing standpoint, and from a safety and vibrancy standpoint, particularly over the last few months.” The company continues to benefit from tech and life sciences tenants seeking high-quality space in urban innovation hubs.

The LightBox Take—These earnings reinforce a critical trend in CRE: the gap between high-quality, well-located assets and commodity office stock continues to widen. Leasing gains by major REITs point to early stabilization–but recovery remains uneven across markets and asset classes.

“In today’s evolving workplace landscape, asset performance is being defined by quality, flexibility, and relevance,” said Dianne Crocker, research director at LightBox. “Occupiers are prioritizing amenities, long-term value, and adaptability. Success in this environment hinges on more than just location—it demands strategic alignment with tenant expectations and market shifts.”

Industrial Sector: Steady Growth with a Focus on Optimization

Industrial REITs continue to benefit from long-term tailwinds tied to e-commerce, reshoring, and supply chain optimization, though growth is beginning to normalize after several years of outsized gains.

Prologis, the world’s largest industrial REIT, posted core FFO of $1.42 per share, marking a 10.9% increase year-over-year. The company maintained strong occupancy at 94.9% and achieved a net effective rent change of 53.7%, underscoring robust tenant demand despite moderating macroeconomic conditions. The company signed leases totaling 58 million square feet and demonstrated strong deployment activity with $811M in acquisitions and $925M in development stabilizations.
Addressing the evolving global landscape, CEO Hamid Moghadam remarked, “A disconnected world will require more warehouse space, not less,” highlighting Prologis’ strategic focus on investing in consumption-driven markets and its ability to navigate ongoing global trade uncertainties.
Rexford Industrial, focused on Southern California infill markets, maintained its full-year guidance despite ongoing market rent declines across its operating regions, delivering core FFO of $0.62 per share, a 6.9% year-over-year increase. The company achieved 5.0% same-property cash NOI growth and executed 2.4 million square feet of leasing during the quarter, with impressive spreads of 23.8% on a net effective basis. Laura Clark, Chief Operating Officer said: “We are seeing some nominal pressure on market rents, but we’re certainly not giving away space in the market and demand continues.”
EastGroup Properties—a leading industrial REIT specializing in last-mile and multi-tenant logistics assets, reported strong Q1 2025 results. FFO per share rose 7.1% year-over-year to $2.12, while total revenue increased 13.1% to $174.45 million, surpassing analyst expectations. The company achieved a 46.9% average rental rate increase on new and renewal leases, reflecting robust pricing power in its Sun Belt-focused portfolio. Same-property net operating income (NOI) grew 5.3%, and the operating portfolio was 97.3% leased and 96.5% occupied at quarter-end.
CEO Marshall Loeb noted, “The past two quarters marked two of our three historic highs for leasing volume.” He added that global trade uncertainty has cast a shadow over leasing and capital markets in the near term, and the company is closely monitoring the environment while working to finalize deals as efficiently as possible.

The LightBox Take—Industrial remains one of the strongest-performing CRE sectors, though REITs are shifting from expansion to optimization. Rent growth remains solid, but the easy wins of the pandemic-era surge are giving way to a more strategic focus on asset management. Crocker noted that industrial REITs are shifting toward more selective leasing and targeted capital deployment, especially in markets where new supply is beginning to balance out demand.

Retail Sector: Value-Oriented Formats Drive Performance

Retail REITs are showing surprising strength, especially in segments aligned with discount, grocery-anchored, and necessity-based shopping.

Simon Property Group, the largest U.S. mall operator, reported FFO of $2.80 per share in Q1 2025, flat year-over-year but exceeding revenue expectations with $1.44 billion. Portfolio occupancy hit 95.5%, and the company reaffirmed its full-year FFO guidance, reflecting confidence in premium retail and outlet center demand. Regarding the impact of tariff announcements on malls: “Traffic is holding up, the malls are actually performing above and the outlets are relatively flat,” said Chairman David Simon. He explained that there was slowdown in border assets near Canada and Mexico.
Federal Realty Investment Trust, focused on grocery-anchored and mixed-use centers, posted solid Q1 2025 results, citing continued leasing momentum in grocery-anchored and mixed-use centers. Management highlighted a strong start to the year, with significant leasing activity, strategic capital allocation, and robust financial performance. The company raised its full-year FFO guidance and expects higher occupancy levels ahead, underscoring its focus on leveraging an affluent tenant base and prime locations to drive long-term growth.
CEO Don Wood highlighted the company’s ability to perform amid economic uncertainty, stating, “The more uncertain in the economy, the better we tend to do,” emphasizing Federal Realty’s strategic positioning in affluent markets and its proven track record of navigating challenging economic conditions.
Brixmor Property Group, operating primarily open-air centers, achieved an FFO of $0.56 per share, surpassing analyst expectations, with total revenue reaching $337.51 million, a 5.4% increase year-over-year. Leasing activity remained robust, with 1.3 million square feet of new and renewal leases executed at a blended cash rent spread of 20.5%. Total leased occupancy stood at 94.1%, reflecting the company’s ability to maintain high occupancy levels despite market challenges.
CEO Jim Taylor noted that the company “capitalized on tenant disruptions by securing better tenants at improved rents, with over two-thirds of recently recaptured bankruptcy spaces under lease or letter of intent agreements at substantial spreads.” He also emphasized that Brixmor’s focus on core categories—such as grocery, specialty grocery, quick-service restaurants, and value apparel retailers—has positioned the company to capture an outsized share of new store openings.

The LightBox Take—Retail REITs anchored by value-driven and service-oriented tenants are outperforming, while traditional malls continue to struggle with structural challenges.
Crocker noted, “As consumer spending continues to diverge, REITs focused on essential retail and experiential offerings are emerging as clear leaders—demonstrating stronger tenant demand and more stable performance.”

Hotel Sector: Travel Recovery Stabilizes Revenue Streams

Hotel REITs are benefiting from continued travel demand, particularly in leisure and business-transient markets, though group bookings remain uneven.

Host Hotels & Resorts, the largest lodging REIT in the U.S., demonstrated solid Q1 performance, with a notable increase in adjusted EBITDA of $514 million, marking a 5.1% year-over-year growth. The company’s Revenue Per Available Room (RevPAR) improved by 5.8%, driven by the strength of the company’s luxury and resort portfolio. Despite macroeconomic uncertainty and a modest reduction in total RevPAR guidance, the company held its outlook for comparable hotel growth.
CEO James Risoleo noted that stronger-than-expected RevPAR growth—driven primarily by rate increases—propelled Q1 results, with standout contributions from Washington, D.C., New York, New Orleans, Los Angeles, and Maui. He highlighted Maui’s recovery as a particularly meaningful driver of portfolio-wide gains, with transient room sales on the island up approximately 70% year-over-year.
Pebblebrook Hotel Trust reported Q1 2025 earnings that exceeded analyst expectations. The company achieved an adjusted FFO per diluted share of $0.16, surpassing the midpoint of its outlook by $0.05. Total revenue reached $320.27 million, exceeding the forecast of $312.38 million. The company capitalized on strong demand in its resort locations, leading to a notable increase in RevPAR.
San Francisco and Washington D.C. showed strong performance, with RevPAR increases of 13% and 14.7% respectively, driven by business group and transient travel. International inbound travel declined by 10% in March, with ongoing concerns about the impact of U.S. government policies on future travel demand. The company anticipates a potential economic slowdown in the second half of the year, leading to a cautious outlook revision.
CEO Jon Bortz commented on emerging challenges, stating, “We have begun to see a few concerning signs, including a slowdown in group leads for the second half of the year, a longer lag in contract execution and more caution among some meeting planners in committing to future events, particularly in the second half of the year.”
Apple Hospitality REIT, whose extensive portfolio positions it as one of the largest owners of upscale, rooms-focused hotels in the U.S., reported Q1 2025 results reflecting a challenging environment. The company reported an EPS of $0.13, slightly below the forecasted $0.14, and total revenue of $327.7 million, missing expectations by $6.03 million.
On the earnings call, CEO Justin Knight addressed the company’s tempered full-year guidance, citing macroeconomic headwinds from reduced government travel and increased operational costs and soft first-quarter performance. While acknowledging these challenges, he reiterated that the underlying fundamentals remain strong, supported by steady demand and broad market diversification.

The LightBox Take—Hotel REITs posted solid Q1 results, supported by steady demand in leisure and improving trends in business-transient travel. However, the outlook has grown more guarded, with several REITs issuing downward guidance amid macroeconomic uncertainty, inconsistent group bookings, and rising operational costs. According to Crocker, “While performance has stabilized across many key urban and leisure markets, hotel REITs are recalibrating expectations in response to mounting cost pressures and soft spots in group and corporate travel. The sector is entering a more discerning phase of the recovery.”

Multifamily Sector: Resilient Demand, But Rent Growth Moderates

Multifamily REITs continue to benefit from strong underlying housing demand, though rent growth has cooled due to elevated new supply in several metro areas.

Equity Residential, with a portfolio concentrated in coastal gateway cities, beat estimates, with a FFO of $0.91 per share, up 2.2% year-over-year. Rental income of $760.8 million missed the consensus mark of $766.8 million, although it was up 4.1% from the same quarter last year. and stable occupancy, though it noted rent growth has plateaued in overbuilt markets.
On the company’s Q1 2025 earnings call, Chief Operating Officer Michael Manelis stated, “As of today, we are not seeing any signs of consumer weakness, which typically shows up and increases the number of lease breaks, unit transfers to lower rent units, increases in delinquencies, or a slowing percent of residents renewing their leases with us.” Manelis added that, despite some resident concerns over job losses, government layoffs in D.C. have not affected occupancy, rent growth, or short-term projections. The region remains over 97% occupied.
Mid-America Apartment Communities (MAA), with a portfolio concentrated in high-growth Sun Belt markets, delivered Q1 2025 results that exceeded expectations. The company reported FFO of $2.21 per share, supported by strong occupancy, healthy rent collections, and sustained pricing power. While new supply remains a factor in several metros, MAA saw continued strength in in-migration and demographic tailwinds.
Executive leadership struck a confident tone heading into the key leasing season, noting that “strong occupancy, improved year-over-year exposure, and record-low resident turnover” position the company well for the busy spring and summer months. Additionally, Bolton highlighted the company’s long-term growth strategy, noting, “We continue to believe that the long-term growth prospects for the Sunbelt region remain compelling, and our portfolio is well positioned to benefit from these trends.”
Camden Property Trust posted Q1 2025 core FFO of $1.72 per share, exceeding guidance by $0.04. The company achieved a record-high customer sentiment score of 91.1, indicating strong resident satisfaction. “New supply has peaked in our markets and apartment absorption continues to be strong,” noted Chairman and CEO Ric Campo. “In fact, new starts are at a thirteen-year low and are down 80% in Austin and between 65–80% in Houston, Denver, Charlotte, Raleigh, Atlanta, Nashville, and Washington, D.C.”

The LightBox Take—The multifamily sector remains fundamentally strong, but supply is beginning to weigh on rent growth, particularly in high-development metros.
“Sun Belt markets still show strength, but the pace of rent gains has slowed. Multifamily REITs are entering a more competitive cycle that rewards operational efficiency and portfolio focus,” said Crocker.

Keep an Eye on What REITs Aren’t Saying Out Loud

As Q2 unfolds, investors and analysts should pay close attention not just to revised guidance and leasing metrics, but to what’s left unsaid in earnings calls. Are REITs quietly slowing capital deployment? Are occupancy “averages” masking regional volatility? And in sectors like multifamily and industrial, will new supply finally tip the balance?

Emerging risks—such as consumer debt pressure, shifting migration patterns, and election-year policy signals—will shape the next wave of earnings reports. As always, the most agile REITs won’t just react to change—they’ll get in front of it.

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