If the reopening trade is dead, the real estate sector, which finally closed above pre-Covid levels this past week, didn’t get the message. Further gains could be ahead.

Few stocks were hit as hard as real estate investment trusts. Normally a fairly defensive sector, the group, which owns malls, office buildings, nursing homes, and other properties that no one wanted to go near at the height of the pandemic, fell 5.3% in 2020, even as the S&P 500 rose 18%. The release of successful trial data from Pfizer’s vaccine in November...