Real estate firms generate long-term cash-flow streams with leverage to rising economic output. This is confirmed by the long-term outperformance of REITs over the last 25 years, compared to both global stocks and global bonds. The outperformance of REITs over this time period is often linked to declining interest rates, however it’s important to note that global equities outperformed global bonds during this time period. Global equities were also levered to falling interest rates and, certainly, to rising economic output. The outperformance of REITs during this time period is a function of their structure and the unique attributes of REITs.