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 BXP, Inc. (NYSE:BXP). BXP, Inc. (NYSE:BXP), earlier known as Boston Properties, owns and operates premier office properties across the United States. On April 2, 2026, BXP, Inc. (NYSE:BXP) closed at $51.78 per share. One-month return of BXP, Inc. (NYSE:BXP) was -2.19%, and its shares lost 14.30% over the past 52 weeks. BXP, Inc. (NYSE:BXP) has a market capitalization of $9.17 billion.
Baron Real Estate Income Fund stated the following regarding BXP, Inc. (NYSE:BXP) in its fourth quarter 2025 investor letter:
“We have remained selectively bullish on office REITs. While we are generally cautious on broader office real estate for several years due to both cyclical and secular headwinds that we expected would persist, we have been able to identify certain geographic markets (New York City) and other well-located, high-quality portfolios of modern office properties (New York City and parts of the West Coast) that we believe are poised to gain market share and outperform as market conditions improve. We believe there is a segment of office REITs that trades at a significant discount to both the private market value and the replacement cost of their respective portfolios, while also trading at a meaningful discount relative to certain publicly traded peers. The Fund maintains a position in BXP, Inc. (NYSE:BXP) (formerly known as Boston Properties), a blue-chip office REIT that owns a portfolio of premier office properties in coastal U.S. markets including Boston, New York City, San Francisco, Washington, D.C., Los Angeles, and Seattle.”
BXP, Inc. (NYSE:BXP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 24 hedge fund portfolios held BXP, Inc. (NYSE:BXP) at the end of the fourth quarter, up from 23 in the previous quarter. While we acknowledge the risk and potential of BXP, Inc. (NYSE:BXP) 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 BXP, Inc. (NYSE:BXP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered BXP, Inc. (NYSE:BXP) and shared the list of stocks discussed by Jim Cramer. 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.
