3 REITs to Buy Before Fed Chair Cuts Interest Rates

Analyst team identifies top REIT picks as new Fed Chair signals rate cuts.

Published on Feb. 8, 2026

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With President Trump's pick for the next Federal Reserve Chair signaling potential interest rate cuts, the article highlights three real estate investment trusts (REITs) that could benefit from lower borrowing costs: Realty Income, Prologis, and the Vanguard Real Estate Index Fund ETF. The author argues these REITs offer high dividend yields, growth potential, and a history of outperformance during previous low-rate environments.

Why it matters

REITs are poised to gain as the new Fed Chair is expected to lower interest rates, reducing borrowing costs and boosting REIT valuations. This could provide income investors with attractive opportunities in a low-yield environment.

The details

The article explains that REITs typically benefit from lower interest rates in three ways: 1) their high dividend yields become more attractive to income investors, 2) their future cash flows are discounted at a lower rate, increasing their valuations, and 3) they can refinance long-term debt at more favorable terms. The author cites the Vanguard Real Estate Index Fund ETF's outperformance during the last prolonged low-rate period from 2009-2015 as evidence of the sector's potential upside.

  • President Trump's pick for the next Federal Reserve Chair, Kevin Warsh, has signaled potential interest rate cuts in the coming months.
  • Federal funds traders now forecast an 81% chance of a rate cut by this summer, with a 45% chance of one in April, before Warsh is even sworn in.

The players

Realty Income

A REIT founded in 1969 and headquartered in Vancouver, Canada, with $61 billion in property value across nine countries. Its clients include major retailers like Lowe's, Chipotle, and Walmart.

Prologis

A San Francisco-based REIT operating in 20 countries with $215 billion in assets under management. It has outpaced the broader REIT sector in dividend growth from 2019 to 2024.

Vanguard Real Estate Index Fund ETF

A passively managed ETF that tracks the MSCI U.S. Investable Market Real Estate 25/50 Index, providing broad exposure to 152 REIT stocks.

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What they’re saying

“After almost four years of tight monetary policy, there are indications that U.S. companies can look forward to lower borrowing costs. That's great news for real estate investment trusts (REITs), which benefit from lower interest rates in three ways.”

— William Dahl, Author (yahoo.com)

What’s next

Federal funds traders are closely watching for the likelihood and timing of the next interest rate cut, which could come as soon as April before the new Fed Chair is sworn in.

The takeaway

With signs pointing to a return to a low-rate environment, these three REIT opportunities offer income investors high dividend yields, growth potential, and a history of outperformance during previous periods of cheap money.