The U.S. REIT sector is massive, with $4.5 trillion in real estate assets and over $1.75 trillion in market capitalization. Yet still, it’s growing more complex by the year.

That’s why we’ve authored a new white paper that outlines these trends and what can be done about them. If you're ready for the full strategic view, access the complete whitepaper on how REITs are navigating these four emerging trends.

Or read on for the trendlines in brief…

As commercial tenants raise their expectations around sustainability, uptime, and ESG transparency, the bar for operational excellence keeps rising. In parallel, energy costs, climate impacts, and regulatory scrutiny are accelerating. The strategies that helped REITs outperform in the past won’t hold up if portfolios don’t evolve in kind.

Today, real estate resilience isn’t just about diversified holdings or prime locations; it’s about managing what’s inside the building envelope: power systems, aging infrastructure, energy reliability, and emissions transparency.

This shift signals a deeper industry truth: facility and energy performance are no longer back-office concerns. They’re boardroom topics and mission-critical to unlocking ROI across REIT portfolios.

Four Trends Reshaping REIT Operations in 2025 and Beyond
 

1. Power Reliability Becomes a Key to NOI

Grid instability, from blackouts to voltage fluctuations, is no longer a distant utility issue. It's a direct threat to portfolio performance, especially in power-dependent sectors like cold storage, logistics, and data centers.

Rising utility costs only heighten the urgency. More REIT operators are prioritizing utility bill management tools and real-time energy monitoring to identify cost drivers, reduce risk exposure, and improve forecasting accuracy.

This signals a notable cultural shift: energy management is moving from the mechanical room to the strategic roadmap.

Inaction cost: Downtime from power disruption doesn’t just impact tenants — it jeopardizes revenue and reputation.

2. REITs Step Up to Mounting Economic Pressures

Volatile interest rates, inflation, labor shortages, and construction material tariffs are just a few of the headwinds.

These macroeconomic forces are turning operational efficiency into a competitive differentiator. And energy efficiency, long seen as a “nice to have,” is quickly becoming a required cost control lever.

Many REITs are reassessing their facility upgrade timelines, investing in energy optimization technologies that deliver fast paybacks, and building smarter capital plans to withstand market fluctuations. Infrastructure planning is not just about upkeep; it’s about futureproofing the business model.

Example: Participating in regional capacity markets like PJM can offer upside but also signal unpredictable energy pricing. Resilient facilities mitigate that volatility.

3. Risk Mitigation Takes New Forms

Risk has always been a REIT priority, but the definition is changing. Increasingly, it includes exposure to climate events, extreme weather, and carbon liability.

By 2050, climate-related property damage could cost REITs over $559 billion. That’s why 83% have evaluated flood risks, 75% have assessed wind and storm exposure, and 74% have analyzed wildfire vulnerabilities.

The regulatory front is just as dynamic. By 2026, over 50 U.S. cities will implement building performance standards or retrofit mandates. Forward-thinking REITs are proactively integrating climate risk into their asset strategies — not just to comply, but to protect asset value and avoid steep retrofit costs later.

Key action: Consider climate scenario modeling and facility benchmarking to inform proactive resilience upgrades.

4. Investor Interest in Carbon and Sustainability Is Rising

Environmental, Social, and Governance (ESG) metrics are no longer optional. A 2024 Morgan Stanley report found that 77% of investors now want market-rate returns and measurable environmental or social impact.

And REITs are responding:

• 76% report having LEED certifications — up from 37% in 2018
   
• 73% have set emissions targets
   
• 86% include climate disclosures in financial reports

Still, many portfolio owners are grappling with the complexities of carbon accounting. Scope 1, 2, and 3 emissions and how to categorize them based on operational control or ownership can significantly impact reported performance.

Why it matters: Sustainability transparency is now tied directly to access to capital, and investors are watching.

Conclusion: Performance-Ready Portfolios Start Inside the Building

These four trends underscore a pivotal truth for REIT leaders: the next phase of outperformance starts with operational intelligence. From energy reliability to emissions visibility, the smartest REITs are those making deliberate, data-driven investments in facility and energy strategy.

At Mantis Innovation, we help organizations bridge the gap between infrastructure realities and investor expectations through actionable, portfolio-wide solutions that deliver measurable value.

Explore the full whitepaper to dive deeper into these trends and discover how your organization can take action today.