Publicly traded real estate investment trusts are buying more data centers than any other property type.
Data centers showed the largest year-over-year increase in portfolio share, rising 15% from 2023 to reach 352 properties, according to the latest data from Nareit, the major REIT industry trade association. Retail properties posted the second-highest annual growth, at 9%. REITs in total owned about 570,000 properties across the United States at the end of 2024, Nareit said.
The data center surge reflects strong demand for cloud computing and artificial intelligence support systems. The 15% annual increase in data center holdings far exceeds the sector's typical growth patterns and signals aggressive expansion by REITs into these high-demand properties.
The retail growth furthered a recovery trend that has seen the sector's portfolio share expand 39% since 2018, the strongest six-year performance among all property types tracked by Nareit.
Storage and apartment properties also had robust long-term growth, both up more than 30% since 2018. Storage property deals climbed 33% over the past six years, while apartment sales gained 30%, reflecting demographic shifts and changing housing preferences that have benefited these sectors.
However, some sectors faced headwinds. Lodging and resort properties suffered the steepest decline, falling 8% year over year and dropping 37% since 2018 as the hotel industry has grappled with changed travel patterns following the pandemic.
Single-family rental properties and office buildings both declined 5% annually, but their longer-term trajectories diverged sharply. Single-family rentals have surged 28% over the past six years as institutional investors target this growing market. Office properties, meanwhile, have fallen 28% amid persistent remote work trends.
Nareit has tracked REIT property holdings since 2018, accounting for portfolio changes as companies enter and exit the publicly traded REIT universe. The data covers all U.S. publicly traded REITs.