Real estate stocks lose out in May, health care REITs notable laggards

[Real estate entrepreneurs meeting to sell a house, discussing real estate deals, with house plans on the table, symbolizing real estate investment and negotiations.]

Real estate stocks lost out to the broader markets in May, ending in the red on average, while the S&P 500 index added over 5%.

Wall Street gained from signs of easing geopolitical tensions in the Middle East, stronger-than-expected jobs report, strong corporate earnings, and renewed optimism surrounding the AI-linked stocks.

However, persistent inflation worries continued to drive the Treasury yields higher. The benchmark U.S. 10-year Treasury yield (US10Y [https://seekingalpha.com/symbol/US10Y]) closed the month 5 basis points higher at 4.44%.

Kevin Warsh was sworn in [https://seekingalpha.com/news/4596371-kevin-warsh-is-sworn-in-as-federal-reserve-chair] as the 17th chairman of the Federal Reserve this month. Treasury yields fluctuated [https://seekingalpha.com/article/4908283-what-moved-markets-this-week] as investors considered whether the Fed may need to keep policy tighter amid lingering inflation concerns.

National debt is now larger [https://seekingalpha.com/news/4598304-infographic-us-debt-officially-outpaces-the-economy] than its economic output. As of March 31, the ratio of publicly held debt to GDP was 100.2%, compared with 99.5% when the last fiscal year ended on September 30, 2025.

For the impact on the stock market, investors don't appear to be concerned for now. "The reason the market keeps rising can be summed up in a few words: earnings growth," said Deep Value Investing.

Meanwhile, real estate stocks have been impacted by fiscal concerns that weighed on U.S. bonds and increased borrowing costs.

The S&P 500 Real Estate Index Sector (SP500-60 [https://seekingalpha.com/symbol/SP500-60]) declined 1.17% month-over-month in May to 279.06 points, while the accompanying State Street Real Estate Select Sector SPDR ETF (XLRE [https://seekingalpha.com/symbol/XLRE]) decreased 0.74% to $43.99.

The Dow Jones REIT Indx Equity REIT Total Return Index (REIT:IND [https://seekingalpha.com/symbol/REIT:IND]) added 0.04%, while the FTSE Nareit All Equity REITs index retreated 0.08%.

Health care REITs stood out as notable laggards during the month of May.

WEEKLY WINNERS & LOSERS

Among largecap losers, CoStar Group (CSGP [https://seekingalpha.com/symbol/CSGP]) led the pack, retreating 5.10% to $32.20.

The week saw the real estate services provider enter into a definitive agreement to acquire [https://seekingalpha.com/news/4598321-costar-to-acquire-zonda-for-800m-in-cash] Zonda for a cash consideration of $800M. Zonda provides new home construction data, homebuilder software, and residential real estate marketplaces, expanding CSGP's reach into a major new segment of the real estate industry.

Welltower (WELL [https://seekingalpha.com/symbol/WELL]) (-4.94% W/W to $205.33) and CBRE Group (CBRE [https://seekingalpha.com/symbol/CBRE]) (-4.58% W/W to $125.04) were the next on the list.

Welltower CFO Timothy McHugh was appointed [https://www.businesswire.com/news/home/20260528792133/en/FrontView-REIT-Appoints-Welltower-Co-President-and-CFO-Tim-McHugh-to-Board-of-Directors] to the board of FrontView REIT (FVR [https://seekingalpha.com/symbol/FVR]) this week.

Lineage (LINE [https://seekingalpha.com/symbol/LINE]) led the gainers in the category, advancing 10.89% week-over-week to $44.41.

Among midcap stocks, Diversified Healthcare Trust (DHC [https://seekingalpha.com/symbol/DHC]) (-6.52% W/W to $8.32) and National Health Investors (NHI [https://seekingalpha.com/symbol/NHI]) (-4.26% W/W to $73.29) led the losers.

National Health Investors held its annual meeting of stockholders on Wednesday, electing all seven director nominees. The week also saw Seeking Alpha analyst Jussi Askola choose [https://seekingalpha.com/news/4597099-sa-analyst-says-these-two-reits-stand-out-as-bargains] the healthcare REIT as a bargain amid a significant transformation at the company. The company is divesting skilled nursing facilities to focus on the undersupplied senior housing market.

Fermi (FRMI [https://seekingalpha.com/symbol/FRMI]) (+15.18% W/W to $6.98) topped the gainers.

Opendoor Technologies (OPEN [https://seekingalpha.com/symbol/OPEN]) was the second-biggest winner, adding 10.28% from the prior week to $5.04. OPEN benefited [https://seekingalpha.com/news/4596972-track-russell-3000-reit-shuffle-opendoor-slated-for-addition-as-clipper-realty-exits] from the news that it is set to be added to the Russell 3000 index.

Chiron Real Estate (XRN [https://seekingalpha.com/symbol/XRN]) led the smallcap losers, declining 3.77% week-over-week to $36.04. Recently, Chiron Real Estate cut its dividend [https://seekingalpha.com/article/4908506-chiron-real-estate-after-the-36-percent-dividend-cut-i-still-remain-bullish] by 36% to $0.16, reallocating capital toward high-return portfolio expansion.

LTC Properties (LTC [https://seekingalpha.com/symbol/LTC]) (-3.18% W/W to $37.41) and Community Healthcare Trust (CHCT [https://seekingalpha.com/symbol/CHCT]) (-2.82% W/W to $17.22) followed in the list.

Claros Mortgage Trust (CMTG [https://seekingalpha.com/symbol/CMTG]) (+11.47% W/W to $2.43) led the gainers in the category.

Here is a look at the subsector performances for the week and the month:
[S&P, Nareit]
Percentage-wise price change across real estate indices

MORE ON REAL ESTATE

* Weekly Market Pulse: The Real Deal [https://seekingalpha.com/article/4908763-weekly-market-pulse-real-deal]
* The REIT Bear Case Is Breaking Down [https://seekingalpha.com/article/4898816-the-reit-bear-case-is-breaking-down]
* U.S. New Home Market Cap Recovers From Blizzards [https://seekingalpha.com/article/4899172-us-new-home-market-cap-recovers-from-blizzards]
* Fermi is the best performing real estate stock in the past month [https://seekingalpha.com/news/4598462-fermi-is-the-best-performing-real-estate-stock-in-the-past-month]
* Mortgage rates up for second straight week, reach about nine-month high [https://seekingalpha.com/news/4598023-mortgage-rates-up-for-second-straight-week]