In this article, we will take a look at the 12 best REIT stocks to buy now.
The US Real Estate So Far in 2025
While the mortgage rates have risen despite the Fed cutting rates, potential homebuyers are left with the choice to either postpone the homebuying or resort to current mortgage rates as well as elevated home prices. According to Freddie Mac, the 30-year fixed mortgage rate went above 7% in the week ended January 16. Experts are convinced that mortgage rates need to drop to 6% or lower for the housing market to come to life and rates above 7% deem the market dead where nobody is going to buy. Lee Baker, a member of CNBC’s Financial Advisor Council, reiterated the adverse situation saying:
“If what you’re hoping or wishing for is an interest rate at 4%, or housing prices to drop 20%, I personally don’t think either one of those things is remotely likely in the near term”
Another issue of concern has been the devastating wildfires in LA which have deepened its already existing housing shortage. Redfin reported that almost one of every six homes within the perimeters of the Palisades and Eaton fires have either been damaged, destroyed or are inaccessible. Meanwhile, the prices in the rental markets with more displaced turning to them.
According to the New York Times, the affectees would find it hard to find accommodation in a metro area that already had a shortage of around 337,000 homes, as of 2022. Data from the Los Angeles Department of Building and Safety reveals that apartment units approved by the city of Los Angeles dropped to a 10-year low in 2024. Victor M. Gordo, the mayor of Pasadena, exclaimed the issue at hand as follows:
“One of the biggest challenges ahead will be getting people who lost their homes into permanent, long-term housing”
With that being said, let’s move to the 12 best REIT stocks to buy now.
An aerial view of a real estate property with multiple buildings and pavement in the foreground.
Our Methodology:
In order to compile a list of the 12 best REIT 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 REIT 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. 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.
Extra Space Storage Inc. (NYSE:EXR) is 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.
11. Public Storage (NYSE:PSA)
Number of Hedge Fund Holders: 28
Public Storage (NYSE:PSA) is the largest owner, operator, and developer of self-storage facilities in the world. The company opened its first self-storage facility in 1972. It also serves as one of the biggest landlords globally with over 170 million net rentable square feet of real estate. PSA is a member of the S&P 500 and FT Global 500.
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 living within a Public Storage trade area.
The iconic brand 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. In the most recent quarter, Public Storage (NYSE:PSA) acquired three self-storage facilities with 0.2 million net rentable square feet. High-growth lease-up properties account for 23% of the total portfolio and are growing.
