U
.S. REITs have significantly outperformed their global peers, driven by a combination of factors including valuation multiple expansion, a stronger dollar, and higher real GDP growth. This outperformance can be attributed to the U.S.'s robust economic fundamentals, such as population increases and productivity gains, which have supported stronger real GDP growth.

    In contrast, international REITs have faced challenges like weaker growth and demographic issues in certain regions. The Vanguard Global ex-US Real Estate ETF (VNQI) trades at lower valuation multiples than its domestic counterpart VNQ, despite comparable return on equity, suggesting potential undervaluation of international real estate.

    While VNQI carries higher risk due to exposure to smaller REITs and less stable markets, its attractive valuation may offer better long-term returns for investors willing to take on additional risk.