2026 Looks Like An Inflection Point For Schwab's US REIT To Launch Higher | SCHH

"The single biggest macro force shaping SCHH's 2026 trajectory is the direction of the 10-year Treasury yield. Real estate investment trusts compete directly with risk-free government bonds for income-seeking capital. When Treasuries yield 4% or more, a REIT paying 3.5% looks unattractive. But if rates drift toward the 3.0% to 3.5% range that BlackRock and other forecasters expect by late 2026, that same REIT dividend becomes compelling."

"Lower long-term rates trigger cap rate compression. Property values move inversely to interest rates because the discount rate used to value future cash flows declines. A warehouse generating steady rental income becomes worth more when buyers can finance acquisitions at 4% instead of 6%. For SCHH, which holds industrial REITs like Prologis (NYSE:PLD) at nearly 9% of the portfolio, this valuation lift flows directly through to net asset value."

"The commercial real estate maturity wall is equally critical. Roughly $162 billion in CRE loans mature in 2026, up 56% from 2025's $104 billion. Much of this debt was originated at 3% to 4% rates and needs refinancing. If rates stay elevated near 6%, refinancing becomes punishing and dividends get cut. If rates fall toward 4%, the crisis becomes manageable. SCHH's fate hinges on this refinancing environment because its holdings must either roll over debt or tap equity markets at reasonable costs."

The Schwab U.S. REIT ETF (SCHH) faces a 2026 inflection driven primarily by the 10-year Treasury and commercial real estate refinancing dynamics. A decline in long-term rates toward 3.0–3.5% would compress cap rates, raise property valuations, and boost SCHH net asset value, benefiting industrial holdings such as Prologis at nearly 9% of the portfolio. Conversely, roughly $162 billion of CRE loans maturing in 2026 creates refinancing stress if rates remain near 6%, risking dividend cuts or dilutive equity issuance. Sector allocation across the fund's 165 holdings will shape the magnitude of gains or losses.

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