10 Best Residential Real Estate Stocks to Buy

4. Sun Communities, Inc. (NYSE:SUI)

Number of Hedge Fund Holders: 34

Value of Hedge Fund Holdings: $534,787,000 

Sun Communities, Inc. (NYSE:SUI), a publicly traded real estate investment trust, focuses on investing in manufactured housing communities, marinas, and recreational vehicle communities.

In the first quarter of 2024, the company’s core FFO per share stood at $1.19, driven by a 7.9% year-over-year increase in North American same-property net operating income. These first quarter results highlight how high demand and limited supply within Sun Communities, Inc.’s (NYSE:SUI) top-tier portfolio drive stable real property income.

Meanwhile, the same-property net operating income for manufactured housing rose by 8% compared to Q1 2023. This was due to multiple factors such as higher rental rates, increased occupancy, and reduced expenses.

The average price target for Sun Communities, Inc. (NYSE:SUI), based on 9 Wall Street analysts’ 12-month projections issued over the past three months, is $135.56. This average price target suggests a potential upside of over 16% from the current price of $116.45.

Here’s what Third Avenue Management said about Sun Communities, Inc. (NYSE:SUI) in its Q4 2023 investor letter:

“Sun Communities, Inc. (NYSE:SUI) (a U.S.- based REIT invested in manufactured housing, RV resorts, and marinas) sold its 10% stake in separately listed Ingenia Communities (an Australian-based owner of active-adult communities and RV parks), while repatriating the capital and announcing the intention to sell non-core properties within North America. These moves support a “return to core” strategy as the company further streamlines to close the discount to Net-Asset Value (“NAV”) and its closest peer.

The Fund participated in several of these developments, primarily by (i) increasing its position in Ingenia Communities alongside the Sun Communities offering and (ii) agreeing to engage in the Five Point exchange offer, which is expected to close in January 2024. The Fund also increased its position in Sun Communities during the period and trimmed back certain holdings for portfolio management purposes.”

As of the first quarter of 2024, 34 hedge funds reported owning a stake in Sun Communities, Inc. (NYSE:SUI), making it one of the best residential real estate stocks to buy.