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.
10. Equity Residential (NYSE:EQR)
Number of Hedge Fund Holders: 30
Equity Residential (NYSE:EQR) focuses on the acquisition, development, and management of residential properties. The firm owns or has investments in 312 properties comprising 84,018 apartment units, with a strong presence in major cities including Boston, New York, Washington, D.C., Seattle, San Francisco, and Southern California, and a growing presence in Denver, Atlanta, Dallas/Ft. Worth and Austin.
EQR began in 1993 as a portfolio of about 20,000 apartment units positioned primarily in garden-style properties in the Midwest and South. The firm’s high-quality, well-located apartment properties continue to capture a strong demand. The firm has positioned this portfolio of urban and suburban properties in places that attract a resident demographic that chooses to rent for lifestyle reasons and due to less housing affordability.
Equity Residential (NYSE:EQR) benefits from a general undersupply of housing for both renting and owning. Its markets have a high cost of single-family housing which creates a robust demand to rent. The firm’s apartment business also benefits from its prime demographic, which chooses to marry later and have children later than previous generations. High employment levels among its well-earning resident base and wage growth across the economy deem the firm’s apartment properties an appealing choice and position EQR well to continue to grow cash flows.
9. 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. It has 30 years of experience owning and operating network assets. Crown Castle currently offers a nationwide footprint of towers, small cells, and fiber to help businesses and organizations connect to technologies and innovations.
Crown Castle Inc. (NYSE:CCI) has a comprehensive infrastructure portfolio comprising 40,000 cell towers, nearly 105,000 on-air or under-contract small cell nodes, and nearly 90,000 route miles of fiber. CCI has a presence in every major US market and is set to benefit from the long-term growth of US wireless data demand. The REIT is meant to offer the US wireless carriers with the prime real estate they require to run their networks. For emerging markets such as 5G, smart city technologies, and the Internet of Things which are to stay, the REIT’s infrastructure solutions are crucial.
Firms such as CCI boasting strong infrastructure assets are considered attractive targets amidst high merger activity in the fiber broadband sector. TPG is in advanced talks to buy the CCI’s fiber business for $8 billion according to people familiar with the matter. The potential sale would enable Crown Castle Inc. (NYSE:CCI) to focus on its core towers business.
8. AvalonBay Communities, Inc. (NYSE:AVB)
Number of Hedge Fund Holders: 35
Avalonbay Communities, Inc. (NYSE:AVB) is a leading multifamily REIT that develops, redevelops, acquires, and manages distinctive apartment homes in the US. It focuses on metropolitan areas with less housing affordability, a vibrant life quality, and strong employment growth. Avalonbay owned or held a direct or indirect ownership interest in 305 apartment communities in 12 states and the District of Columbia, as of September 30.
Avalonbay serves as the largest publicly traded multifamily REIT and has shown 30 years of growth as the industry leader. The REIT 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 its 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 beaten 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 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.
7. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 35
VICI Properties Inc. (NYSE:VICI) is one of the largest owners of gaming, hospitality, and entertainment destinations in the US. The S&P 500 experiential real estate investment trust owns 93 experiential assets comprising 54 gaming properties and 39 other experiential properties across the US and Canada.
VICI is one of the largest triple-net lease REITs. As compared to other traditional net lease REITs, VICI assets have high barriers to entry and high financial transparency. Since the gaming regulatory environment creates high barriers to entry, the REIT benefits from a 100% occupancy rate as tenants’ 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.
VICI Properties Inc. (NYSE:VICI) has been resilient against the pandemic, inflation, and other challenges in the macro environment. The REIT has shown dividend durability and growth in adjusted funds from operations (AFFO) per share. The track record of growth is promising as the REIT has announced almost $37 billion of domestic and international investments across gaming and other experiential assets since its formation in 2017.
6. 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 REIT owns interests in seniors housing and post-acute communities, and outpatient medical properties concentrated in high-growth markets in the United States, Canada, and the United Kingdom.
Welltower is recognized for its unmatched relationship network and premier-quality healthcare real estate portfolio. The REIT has been through 40 years of exclusively investing in health care. With the theme of a growing 80+ population growth in the US, a REIT such as Welltower is poised to grow. The Senior Housing trends are favorable, offering a compelling backdrop for multi-year revenue growth based on the rising older population and a diminished new supply.
Morgan Stanley analyst Ronald Kamdem retained a Buy rating on Welltower Inc. (NYSE:WELL), setting a price target of $145. In early January, Jefferies upgraded the stock from Hold to Buy, based on the favorable outlook for senior housing operating portfolios which are to experience substantial growth.
5. Simon Property Group, Inc. (NYSE:SPG)
Number of Hedge Fund Holders: 48
Simon Property Group, Inc. (NYSE:SPG) is an REIT that engages in the ownership of premier shopping, dining, entertainment, and mixed-use destinations. The REIT 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, as of September 30. Internationally, Simon 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 includes properties like shopping centers, many generating $100 million or even higher in annual NOI. No other real estate type can match the longevity, embedded future growth, and NOI generation of these centers. Simon is one of the largest landlords to the world’s most important retailers.
The Chief Executive Officer, David Simon, was pleased with the strong financial and operational performance as well as the successful openings of Tulsa Premium Outlets and the expansion of Busan Premium Outlets in Q3 2024. Funds From Operations (FFO) was $1.067 billion, up from $1.201 billion in the prior year. Year over year, Domestic property NOI climbed 5.4% and portfolio NOI rose 5%.
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 6,700 diverse customers across two business-to-business and retail/online fulfillment categories.
2.8% of the global GDP flows through the REIT’s distribution centers annually. PLD serves as the largest global owner of logistics real estate complimented by an unrivaled scale and a unique portfolio, with nearly 1.2 billion square feet in 20 countries across four continents. It 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’ CAGR for earnings as well as dividends between 2018 and 2023 outpaces other REITs in the sector. The REIT recently closed 2024 with solid results, with net earnings per diluted share increasing 21.9% over the year. With favorable trends in the data center and energy businesses, the REIT believes in a bright future outlook for itself.
3. Digital Realty Trust, Inc. (NYSE:DLR)
Number of Hedge Fund Holders: 52
Digital Realty Trust, Inc. (NYSE:DLR) is a real estate investment trust that owns, operates, and invests in carrier-neutral data centers. The firm delivers the full spectrum of data center, colocation, and interconnection solutions thereby supporting leading enterprises and service providers.
DLR’s data center platform benefits from the growing global demand from a diversified, high-quality customer base. Secular tailwinds remain strong with digital transformation driving a strong data center demand. The REIT 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 expects the REIT’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 robust demand in artificial intelligence and hyperscale, stronger renewal spreads, and higher yields from new developments.
2. Equinix Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 55
Equinix Inc. (NASDAQ:EQIX) serves as the world’s digital infrastructure company. The company was founded in 1998 as a vendor-neutral multitenant data center provider and serves 73 markets across 34 countries, enabling businesses to scale across the world’s largest network of interconnected data centers.
An unrivaled global reach and differentiated global platform with $41 billion of invested capital is the EQX competitive advantage. The REIT gives customers access to 2,000 network services, 3,000 cloud and IT services, and more than 400 content and digital media services. While the robust demand for AI-enabling digital infrastructure from diverse customers strengthens the firm’s leadership position, Equinix continues to make extensive investments across its global operations to support customers’ digital infrastructure needs with 57 major projects underway across 22 countries, as of 2024’s third quarter.
EQX has the privilege of witnessing 87 consecutive quarters of top-line revenue growth, the longest streak of any S&P500 company. Equinix Inc. (NASDAQ:EQIX) is well positioned to capitalize on future opportunities with digital infrastructure becoming crucial to delivering services globally.
1. American Tower Corporation (NYSE:AMT)
Number of Hedge Fund Holders: 73
American Tower Corporation (NYSE:AMT) is an independent owner, operator, and developer of multitenant communications real estate. The company boasts a solid portfolio of more than 148,000 communications sites and a highly interconnected footprint of US data center facilities.
AMT is a rather long-term investment as it continues to benefit from the rising strong growth in mobile data consumption and the demand for its portfolio of communications assets. The company is making solid progress as carrier rollouts of 5G coverage are driving robust activity levels in America and Europe. Simultaneously, emerging markets like those in Africa are seeing healthy pipelines of new business driven by network upgrades and coverage expansion.
The demand for the company’s global portfolio of communications infrastructure assets counters the problems facing it such as its most recent quarter’s 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: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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