Baron Real Estate Income Fund Adds to Essex Property Trust on Favorable Supply/Demand Backdrop

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2▲2 ▼0Impact / 5
Summary · why it matters

Baron Real Estate Income Fund increased its exposure to multifamily REITs Equity Residential, Essex Property Trust, Inc. (NYSE:ESS), and UDR, Inc. during the second quarter of 2026, according to the fund's Q2 2026 investor letter. The fund said it had maintained a cautious view on multifamily REITs in 2025 due to modest near-term growth prospects, job losses, younger renters staying home or doubling up, and elevated apartment inventory, but has now turned more constructive. Its support for the shift includes rental affordability versus for-sale housing, with move-outs to purchase remaining at historic lows, a favorable supply outlook through 2027, partial inflation hedging through annual leases, strong rent-to-income ratios among employed renters, and attractive public market valuations relative to private markets and other REIT categories. Essex Property Trust is a fully integrated real estate investment trust that acquires, develops, redevelops, and manages multifamily residential properties; it closed at $271.39 per share on September 21, 2026, down 5.69% over the past month and up 1.33% over the past 52 weeks, with a market capitalization of $18.71 billion and a 52-week trading range between $238.46 and $303.35. The Baron Real Estate Income Fund gained 12.18% for Institutional Shares in the quarter, modestly outperforming the MSCI US REIT Index, which rose 11.84%.

Impact on assets 5

Real Estate▲
Equity Residential
EQR
▲ PositiveDemandrelevance

Baron Real Estate Income Fund increased its Equity Residential exposure on a favorable multifamily supply/demand backdrop and improving renter fundamentals.

UDR Inc
UDR
▲ PositiveDemandrelevance

Baron Real Estate Income Fund added to UDR on the constructive multifamily demand and supply outlook.

Financials▲