Active REIT ETF Tops Peers as Occupancy Stabilizes

ALPS Active REIT ETF (REIT) rose 14.66% year-to-date in 2026, outperforming the largest passively managed real estate ETF by more than 500 basis points. The ETF is actively managed and holds exposure across retail, industrial, apartment and office property sectors.

Fund managers have shifted holdings toward sub-sectors showing signs of stabilization and operational improvement, according to fund disclosures and market commentary. Investors have noted interest in real estate exposure that has lower correlation with artificial intelligence-driven trades.

Industry data for early 2026 show occupancy at 95.6% for retail, 92.5% for industrial, 91.5% for apartments and 86.0% for office. Nareit reported that broad office market fundamentals are in the early stages of a space market equilibrium. The trade group also reported that net absorption fell short of net deliveries for retail, apartments and industrial in the first quarter of 2026, while noting each sector is moving toward a balance of demand and supply.

Nareit added that retail occupancy has remained generally consistent in recent years and that industrial, apartment and office occupancy rates had trended downward but are now showing signs of stabilization. Nareit cited CoStar data indicating the office sector is at the nascent stages of supply-demand equilibrium and that retail, apartment and industrial sectors are progressing toward their respective equilibriums.

Market participants are watching leasing activity, new deliveries and rent growth for signs that occupancy stabilization will affect operating income and rents. Office occupancy at 86.0% remains the lowest among the major property types, reflecting ongoing adjustments in demand for office space. Industrial, apartment and retail occupancy are higher but have not uniformly recovered past prior troughs.

The performance gap between active and passive real estate funds in 2026 reflects differences in portfolio positioning and the ability of actively managed ETFs to change holdings more quickly than passive funds. Upcoming data on leasing, deliveries and rent trends are expected to shape near-term performance for REITs and related ETFs.