Baron Capital, an investment management company, released its Q4 2025 letter for its “Baron Real Estate Income Fund”. A copy of the letter can be downloaded here. In 2025, the Fund appreciated 3.74% (Institutional Shares), exceeding the 1.68% gain for the MSCI US REIT Index (the REIT Index). In Q4 2025, the Fund declined modestly by 0.40%, outperforming the Index’s 1.99% decline. In contrast to the substantial double-digit growth delivered in 2023 and 2024, the Fund’s modest performance in 2025 can be attributed to a variety of factors, such as stronger relative growth in several sectors outside of real estate, ongoing interest rate headwinds, and specific REIT subcategory headwinds. As of December 31, 2025, the Fund’s net assets are as follows: REITs (71.2%), non-REIT real estate companies (25.0%), and cash and cash equivalents (3.8%). Also, the Fund currently has investments in 13 REIT categories. Heading into 2026, the Firm is optimistic about the prospects for the stock market and the Baron Real Estate Income Fund. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Baron Real Estate Income Fund highlighted stocks such as Iron Mountain Incorporated (NYSE:IRM). Iron Mountain Incorporated (NYSE:IRM) is a REIT that provides storage and information management solutions. On April 1, 2026, Iron Mountain Incorporated (NYSE:IRM) closed at $100.95 per share. One-month return of Iron Mountain Incorporated (NYSE:IRM) was -5.92%, and its shares gained 21.48% over the past 52 weeks. Iron Mountain Incorporated (NYSE:IRM) has a market capitalization of $30.03 billion.
Baron Real Estate Income Fund stated the following regarding Iron Mountain Incorporated (NYSE:IRM) in its fourth quarter 2025 investor letter:
“Shares of Iron Mountain Incorporated (NYSE:IRM), a company that offers records storage management along with an evolving fast-growing data center segment, detracted from performance during the quarter after the company posted a disappointing quarter of new bookings within its higher growth data center business. In addition, a short report presented at an investor conference questioned the company’s accounting adjustments and overall leverage levels added an overhang for the shares. While we disagree with the short report and believe the company has compelling long-term growth prospects, we harvested losses, exited our position, and reallocated capital to higher conviction ideas. We may revisit the investment later.”
