In this article, we will take a look at the 12 best real estate and realty stocks to buy now.
Real Estate So Far in 2025
As the US housing market headed into 2025, it witnessed good as well as bad news. Although the supply has increased with active listings in November 12.1% higher over the year, Redfin revealed that the majority of those homes had been on the market for at least 60 days without going under a sales contract, marking the highest share for any November since the year 2019.
While mortgage rates have averaged over 6% for the past 24 months, home buyers are not expecting mortgage rates to decline substantially. As the year ended, a rise in mortgage interest rates toward the end of December ended up impacting the mortgage demand. According to the Mortgage Bankers Association’s seasonally adjusted index, total mortgage application volume for the two weeks ended December 27 declined 21.9% as compared with the week before that period. Mike Fratantoni, chief economist at the Mortgage Bankers Association, reiterated the bitter impact of the mortgage rates moving higher through the last week of 2024 as he said:
“Not surprisingly, this increase in rates — at a time when housing activity typically grinds to a halt — resulted in declines in both refinance and purchase applications.”
Bess Freedman, Brown Harris Stevens CEO, pointed towards a troubling trifactor encompassing rates, inventory, and prices for this year. She expects the new year to be turbulent and volatile for the real estate although the public does have certainty with the president now which is good. Bess also talked about the US demographics and how first-time home buyers are older than ever, nearing 40s which is a bad sign indicating young people not being able to afford. While the situation around Trump’s tariffs and rates potentially going up remains unclear as of yet, homeownership continues to be an American dream in her opinion.
With that being said, let’s move to the 12 best real estate and realty stocks to buy now.
Our Methodology:
In order to compile a list of the 12 best real estate and realty stocks to buy now, we first use a stock screener to make an extended list of the relevant companies with the highest market caps. Moving on, we shortlisted the top 12 stocks from our list which had the highest number of hedge fund holders. The 12 best real estate and realty stocks to buy now have been arranged in ascending order of their hedge fund holders as of Q3.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12 Best Real Estate and Realty Stocks To Buy Now
12. Extra Space Storage Inc. (NYSE:EXR)
Number of Hedge Fund Holders: 28
Extra Space Storage Inc. (NYSE:EXR) is a fully integrated, self-administered, and self-managed real estate investment trust headquartered in Salt Lake City. The company owned and/or operated 3,862 self-storage stores in 42 states and Washington, D.C., as of September 30, 2024. Customers can select from a variety of conveniently located and secure storage units across the US including boat storage, RV storage, and business storage.
Extra Space Storage Inc. (NYSE:EXR) has the privilege of being the largest operator of self-storage properties in the United States. The company focuses on storage which is a need-based, recession-resilient asset class with rising utilization, awareness, length of customer stay, and demand drivers in positive and negative economic environments. The shareholder returns potential remains strong with storage having the highest cumulative total return of any real estate sector since 1999.
The REIT is well positioned in a highly fragmented sector with a solid balance sheet, strong operational efficiency, robust occupancy gains, massive scale, and disciplined growth through accretive acquisitions and strong partnerships. Jefferies analyst Jonathan Petersen recently maintained its Buy rating on the stock as the firm remains cautiously positive on the self-storage sector into 2025. While investors were advised not to rush buying EXR shares ahead of the upcoming quarter with the initial outlooks expected to be conservative, a housing market recovery in 2025 would potentially lead to increased demand for self-storage and drive upward adjustments to guidance and estimates.
11. Public Storage (NYSE:PSA)
Number of Hedge Fund Holders: 28
Public Storage (NYSE:PSA) is an owner, operator, and developer of self-storage facilities. The company opened its first self-storage facility in 1972 and has become the largest owner and operator of self-storage facilities in the world. It also serves as one of the biggest landlords across the world with more than 170 million net rentable square feet of real estate.
Public Storage (NYSE:PSA) has maintained a leadership position in the self-storage industry for almost half a century. The firm boasted industry-leading cash flow generation, the strongest operating metrics, and the lowest leverage, as of September 30, 2024. An unmatched owned scale and locations are a distinct competitive advantage for the self-storage leader with half of the U.S. population residing within a Public Storage trade area.
The iconic brand pursues a superior growth strategy and has achieved significant growth over the years. Since the beginning of 2019, the firm’s portfolio size has expanded by 36% through $12 billion of investment and an addition of 59 million square feet. High-growth lease-up properties account for 23% of the total portfolio and continue to grow.
10. Crown Castle Inc. (NYSE:CCI)
Number of Hedge Fund Holders: 34
Crown Castle Inc. (NYSE:CCI) serves as the largest provider of communications infrastructure in the United States. The company has 30 years of experience owning and operating network assets. It was founded in 1994 with an initial portfolio of 133 cell towers. In 1998, it went public with approximately 1,400 towers. Crown Castle now offers a nationwide footprint of towers, small cells, and fiber to help businesses and organizations connect to technologies and innovations.
The REIT has a presence in every major US market through over 40,000 cell towers, 105,000 on-air or under-contract small cells, and 90,000 route miles of fiber. The company is rightly positioned to capitalize on the growing demand for data in the United States and claims to have a strong trajectory with growth opportunities for the years to follow. The company is meant to offer the US wireless carriers with the prime real estate they require to run their networks. For tailwinds such as 5G and the Internet of Things which are to stay, the firm’s infrastructure solutions are crucial.
Amidst high merger activity in the fiber broadband sector, firms such as CCI boasting strong infrastructure assets tend to be attractive targets. TPG Inc. is currently in advanced talks to buy the company’s fiber business for nearly $8 billion, according to people familiar with the matter. The potential sale would enable Crown Castle to focus on its core towers business. Shares of the REIT were up 2.1% in trading following the news.
9. AvalonBay Communities, Inc. (NYSE:AVB)
Number of Hedge Fund Holders: 35
Avalonbay Communities, Inc. (NYSE:AVB) is a leading multifamily real estate investment trust that develops, redevelops, acquires, and manages distinctive apartment homes in the best US markets. The company focuses on metropolitan areas with a vibrant quality of life, less housing affordability, and strong employment growth. The firm owned or held a direct or indirect ownership interest in 305 apartment communities comprising 92,908 apartment homes in 12 states and the District of Columbia, as of September 30.
Avalonbay serves as the largest publicly traded multifamily REIT and has demonstrated 30 years of growth as the industry leader. The company continues to evolve to deliver superior growth as it optimizes its portfolio increasing allocation to suburbs and expansion regions and advances towards a $10 million incremental NOI for 2024. While the firm’s same-store portfolio performed well through the peak leasing season, the outlook for 2025 remains favorable supporting a healthy same-store revenue growth outlook.
While Avalonbay Communities, Inc. (NYSE:AVB) has beat the consensus estimate in each of the last four quarters, it is to reveal its fiscal fourth-quarter earnings for 2024 on January 29. Regarding the upcoming results, analysts tend to be positive and expect the company to report a profit of $2.82 per share on a diluted basis, up 2.9% from the year-ago quarter. Previously, the firm’s third-quarter FFO and revenue surpassed Wall Street estimates.
8. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 35
VICI Properties Inc. (NYSE:VICI) is an experiential REIT that owns one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations in the United States. This portfolio includes 93 experiential assets across a diverse portfolio comprising 54 gaming properties and 39 other experiential properties across the US and Canada.
VICI is one of the largest triple-net lease REITs. The firm sets it apart from traditional net lease REITs with assets having high barriers to entry and high financial transparency. Since the gaming regulatory environment creates high barriers to entry, the firm benefits from a 100% occupancy rate as tenant’s ability to move locations is limited. VICI remains diversified with multiple revenue streams including hotel rooms, meeting and convention space, gaming space, entertainment venues, and retail outlets.
Although elevated interest rates continue to be a threat to REITs including VICI Properties Inc. (NYSE:VICI) deeming buying new properties expensive, the fact that the firm has been resilient against the pandemic, inflation, and other challenges in the macro environment is commendable. The REIT has shown dividend durability and growth in adjusted funds from operations (AFFO) per share.
7. Welltower Inc. (NYSE:WELL)
Number of Hedge Fund Holders: 37
Welltower Inc. (NYSE:WELL) delivers healthcare infrastructure by providing real estate capital to leading seniors housing operators, post-acute care providers, and health systems. The company was incorporated as a health care REIT in 1985. It owns interests in seniors housing and post-acute communities, and outpatient medical properties concentrated in high-growth markets in the US, Canada, and the UK.
The firm is known for its unmatched relationship network and premier-quality healthcare real estate portfolio. It has witnessed more than 40 years of exclusively investing in health care. With the current theme of accelerating 80+ population growth in the US, Welltower is poised to grow. The Senior Housing trends are favorable, offering a compelling backdrop for multi-year revenue growth based on the growing older population and a diminished new supply.
Welltower Inc. (NYSE:WELL) witnessed a positive shift in rating as Jefferies upgraded the stock from Hold to Buy, based on the favorable outlook for senior housing operating portfolios which are to experience substantial growth. The analyst told investors in a research note that the REIT is the “premier” senior housing real estate investment trust with 57% net operating income exposure. Additionally, the REIT’s margin growth is expected to improve through its plans to expand the reach of its end-to-end technology platform to additional operators in 2025.
6. Simon Property Group, Inc. (NYSE:SPG)
Number of Hedge Fund Holders: 48
Simon Property Group, Inc. (NYSE:SPG) engages in the ownership of premier shopping, dining, entertainment, and mixed-use destinations, which primarily include malls, Premium Outlets, and The Mills. As of September 30, SPG owned or held an interest in 196 income-producing properties in the US, comprising 93 malls, 70 Premium Outlets, 14 Mills, six lifestyle centers, and 13 other retail properties in 37 states and Puerto Rico. Internationally, the firm had ownership in 35 Premium Outlets and Designer Outlet properties primarily located in Asia, Europe, and Canada.
With three decades in operation, Simon Property Group, Inc. (NYSE:SPG) has demonstrated growth, resilience, and innovation in becoming the preeminent owner and operator of best-in-class retail real estate properties, with scale. Simon’s portfolio remains differentiated by product type, geography, and tenant mix. This portfolio stands unmatched as it includes properties like shopping centers, many generating $100 million or more in annual NOI. Thus, no other real estate type can match the longevity, embedded future growth, and NOI generation of these centers.
The management was pleased with the strong financial and operational performance in Q3 alongside the successful openings of Tulsa Premium Outlets and the expansion of Busan Premium Outlets. Funds From Operations (FFO) was $1.067 billion as compared to $1.201 billion in the preceding year. Domestic property NOI rose 5.4% and portfolio NOI increased 5% as compared to the prior year period.
5. CBRE Group, Inc. (NYSE:CBRE)
Number of Hedge Fund Holders: 49
CBRE Group, Inc. (NYSE:CBRE) is one of the largest commercial real estate services and investment companies globally. The firm has a leading global market position in leasing, property sales, outsourcing, property management, and valuation. CBRE serves clients in over 100 countries across the globe. These clients are served through three business segments including REI (real estate investments), advisory services, and GWS (global workplace solutions).
CBRE Group, Inc. (NYSE:CBRE) has the privilege of being the largest commercial property developer in the US with $148 billion of assets under management within its Investment Management business. Through building its resilient businesses, its leadership in the global leasing markets, scaling and diversifying its business resulting in a growing total addressable market, CBRE’s short and long-term growth prospects stand promising.
The firm demonstrated its business strength and resilience in its recent quarter by posting its second-highest third-quarter core earnings on record. The strong quarterly performance featured all three business segments experiencing strong double-digit revenue and segment operating profit growth. On January 2, the stock’s rating was upgraded by analysts at Jefferies Financial Group from Hold to Buy, currently having a $152 target price on the stock, up from their previous target price of $133 and maintaining a positive 2025 outlook on commercial real estate services.
4. Prologis, Inc. (NYSE:PLD)
Number of Hedge Fund Holders: 49
Prologis, Inc. (NYSE:PLD) is a global leader in logistics real estate and focuses on high-barrier, high-growth markets. The company leases modern logistics facilities to approximately 6,700 diverse customers across two major categories, business-to-business and retail/online fulfillment.
Considering that 2.8% of the global GDP flows through its distribution centers annually, PLD has a strong global standing. The firm serves as the largest global owner of logistics real estate complimented by an unparalleled scale and an irreplaceable portfolio, with nearly 1.2 billion square feet in 20 countries across four continents. PLD is in a good position as the partner of choice for leading global customers, to cater to their needs in supply chain, digital, and energy infrastructure.
Prologis has shown a solid track record of growth relative to other logistics real estate investment trusts. The company’s CAGR for earnings as well as dividend between 2018 and 2023 outpaces other REITs in the sector. The company remains positive on the outlook for its business based on favorable industry conditions including growing e-commerce and vacancies still being low in the context of history.
3. Digital Realty Trust, Inc. (NYSE:DLR)
Number of Hedge Fund Holders: 52
Digital Realty Trust, Inc. (NYSE:DLR) owns, operates, and invests in carrier-neutral data centers. The company delivers the full spectrum of data center, colocation, and interconnection solutions. These flexible, secure, and scalable data center solutions tend to support enterprises and service providers and meet critical infrastructure needs. DLR was incorporated in Maryland in March 2004.
DLR’s leading data center platform leverages the growing global demand from a diversified, high-quality customer base. The firm’s global data center platform enables it to deliver value and security on six continents in over 25 countries and more than 50 metro areas. The firm has durable competitive advantages in the form of a global footprint serving the full customer spectrum from enterprise to hyperscale. With embedded internal expertise as one of the world’s largest data center acquirers, developers, owners, and operators, Digital Realty Trust is a promising stock.
UBS analyst John Hodulik upgraded his Hold rating on the stock to Buy. Hodulik expects the firm’s funds from operations per share to grow 5% in 2025, accelerating to 7% in 2026, and 10% in 2027. The positive outlook was based on stronger renewal spreads, robust demand in artificial intelligence and hyperscale, and higher yields from new developments.
2. Equinix Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 55
Equinix Inc. (NASDAQ:EQIX) is a leading digital infrastructure company. The firm was formed in 1998 as a vendor-neutral multitenant data center provider. It currently serves 73 markets across 34 countries and enables businesses to scale across the world’s biggest network of interconnected data centers.
Equinix Inc. (NASDAQ:EQIX) has an unrivaled global reach and differentiated global platform with $41 billion of invested capital as its competitive advantage. The firm offers customers access to 2,000 network services, 3,000 cloud and IT services, over 400 content and digital media services, and more than 4,800 enterprises. While the continued robust demand for AI-enabling digital infrastructure from a highly diverse set of customers strengthens the firm’s leadership position, Equinix continues to make extensive investments across its global operations to support customer’s digital infrastructure needs with 57 major projects underway across 22 countries, as of 2024’s third quarter.
For investors looking for a proven track record of growth and profitability, Equinix has a lot to offer. It is worth mentioning that the firm has witnessed 87 consecutive quarters of top-line revenue growth, the longest streak of any S&P 500 company. With digital infrastructure being the backbone of today’s economy and becoming crucial to delivering services globally, Equinix Inc. (NASDAQ:EQIX) is in an attractive spot to capitalize on the opportunities lying ahead. As of Q3, the company is held by 55 hedge funds.
1. American Tower Corporation (NYSE:AMT)
Number of Hedge Fund Holders: 73
American Tower Corporation (NYSE:AMT) is one of the largest global real estate investment trusts founded in 1995 as an American Radio subsidiary. The firm offers services and solutions to deploy and support wireless networks in 24 countries. It has a leading portfolio of independently owned US and international tower real estate and a network of data centers in the US. AMT’s customers include mobile network operators, multinational telecommunications companies, media and broadband providers, and government agencies.
Although the stock has declined 15.51% over the past year, it is a long-term investment as it continues to benefit significantly from the ongoing exponential growth in mobile data consumption and the strong underlying demand for its portfolio of communications assets thereby making AMT well-positioned to drive strong sustained growth and shareholder returns.
The firm is making solid progress as carrier rollouts of 5G coverage are driving robust activity levels in America and Europe while emerging markets like those in Africa are witnessing healthy pipelines of new business driven by network upgrades and coverage expansion. The robust underlying growth counters the issues facing AMT such as its third quarter’s total revenue growing by less than 0.1%. This was due to the sale of its operations in India to an affiliate of Brookfield Asset Management.
While we acknowledge the potential of AMT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than AMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
