Wall Street financial giant JPMorgan made significant adjustments to its ratings for nine key investment targets in its 2026 outlook for REITs (Real Estate Investment Trusts) and real estate services companies. Seven of these targets saw downgrades, while two were upgraded.

Senior analyst Anthony Paolone noted in the report, "The higher number of downgrades reflects a more tiered rating distribution within our coverage, particularly as these ratings are relative to one another. This shift comes amid increasing probabilities of a U.S. economic soft landing and expectations of a prolonged Fed rate-cutting cycle."

JPMorgan's 2026 outlook suggests that the REIT and real estate services sector is entering a phase of moderate growth with limited same-store expansion. Future stock performance is likely to be driven by relative valuation and balance sheet resilience rather than broad-based fundamental improvements. Consequently, the firm downgraded several REITs and real estate services stocks from "Overweight/Neutral" due to reduced relative opportunities—slower growth, fully priced valuations, or tougher comps after recent strong rallies. The downgrades highlight a more stratified risk-reward landscape.

**Downgraded REITs/Real Estate Services Companies:** - **Realty Income (O.US)**: Cut from "Neutral" to "Underweight" due to its large scale making above-average earnings growth harder to achieve compared to net-lease REIT peers. - **Public Storage (PSA.US)**: Lowered from "Overweight" to "Neutral" as core growth improvements are expected to be slow and non-linear. - **Welltower (WELL.US)**: Downgraded from "Overweight" to "Neutral" based on short-term stock price trends, not deteriorating growth prospects. - **Regency Centers (REG.US)**: Moved to "Neutral" from "Overweight," though JPMorgan still views REG as having one of the best platforms in the REIT space with solid long-term growth potential. - **Kennedy Wilson (KW.US)**: Slashed from "Neutral" to "Underweight" given limited upside from its pending privatization bid by CEO William McMorrow and Fairfax Financial. - **UDR (UDR.US)**: Downgraded from "Neutral" to "Underweight." - **SmartStop (SMA.US)**: Adjusted from "Overweight" to "Neutral."

**Upgraded Picks:** - **Federal Realty Investment Trust (FRT.US)**: Jumped from "Neutral" to "Overweight" as its capital recycling strategy—reallocating proceeds from mature assets into higher-quality retail properties (especially in high-income/growth submarkets)—is gaining traction, improving 2026 growth visibility. This aligns with JPMorgan's preference for "visible exogenous growth" (acquisitions/redevelopment pipelines). - **Camden Property Trust (CPT.US)**: Raised from "Underweight" to "Neutral" due to its stronger balance sheet enabling larger buybacks and development flexibility in 2026, offering better relative risk-reward versus peers like UDR.