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 like Vornado Realty Trust (NYSE:VNO). Vornado Realty Trust (NYSE:VNO) is a real estate investment trust that owns and operates premier office and street retail properties. On April 2, 2026, Vornado Realty Trust (NYSE:VNO) closed at $25.35 per share. One-month return of Vornado Realty Trust (NYSE:VNO) was -5.90%, and its shares lost 23.18% over the past 52 weeks. Vornado Realty Trust (NYSE:VNO) has a market capitalization of $5.29 billion.
Baron Real Estate Income Fund stated the following regarding Vornado Realty Trust (NYSE:VNO) in its fourth quarter 2025 investor letter:
“During the quarter, we exited the Fund’s position in Vornado Realty Trust (NYSE:VNO), an owner and developer of premier office and street retail properties concentrated in New York City and reallocated the capital to real estate companies that we believe have superior near term growth. We remain optimistic about the long-term prospects for Vornado and may revisit the company in the future.”
Vornado Realty Trust (NYSE:VNO) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 28 hedge fund portfolios held Vornado Realty Trust (NYSE:VNO) at the end of the fourth quarter, compared to 30 in the previous quarter. While we acknowledge the risk and potential of Vornado Realty Trust (NYSE:VNO) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Vornado Realty Trust (NYSE:VNO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Vornado Realty Trust (NYSE:VNO) and shared the list of must-buy real estate stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
