5 Best Real Estate and Realty Stocks To Buy According To Hedge Funds

In this article, we discuss the 5 best commercial real estate stocks to buy according to hedge funds. If you wish to go through our detailed analysis of the real estate market, check out the 13 Best Real Estate and Realty Stocks to Buy According to Hedge Funds.

5. Equinix, Inc. (NASDAQ:EQIX)

Number of Hedge Fund Holders: 44

Equinix, Inc. (NASDAQ:EQIX) is a multinational corporation headquartered in Redwood City, California, with a core focus on Internet connectivity and data center services. As a prominent figure in the worldwide colocation data center industry, Equinix, Inc. (NASDAQ:EQIX) offers businesses access to vital sites, strategic partnerships, and avenues that facilitate the rapid and streamlined expansion of their digital services.

As of the end of the second quarter of 2023, 44 hedge funds in Insider Monkey’s database were long Equinix, Inc. (NASDAQ:EQIX). The most significant hedge fund stakeholder of Equinix, Inc. (NASDAQ:EQIX) was Ian Simm’s Impax Asset Management which owns a $417.54 million stake in the company.

Baron Real Estate Fund made the following comment about Equinix, Inc. (NASDAQ:EQIX) in its second quarter 2023 investor letter:

“We recently increased the Fund’s exposure to data center REITs by acquiring additional shares in Equinix, Inc. (NASDAQ:EQIX) and re-initiating a position in Digital Realty Trust, Inc.

Data center landlords such as Equinix and Digital Realty are benefiting from record low vacancy, demand outpacing supply, more constrained power availability, and rising rental rates. Several secular demand vectors, which are currently broadening, are contributing to robust fundamentals for data center space globally. They include the outsourcing of information technology infrastructure, increased cloud computing adoption, the ongoing growth in mobile data and internet traffic, and artificial intelligence as a new wave of data center demand. Put simply, each year data continues to grow exponentially, and all of this data needs to be processed, transmitted, and stored – supporting increased demand for data center space. In addition, while it is still early innings, we believe artificial intelligence could not only provide a source of incremental demand but also further accelerate existing secular trends by driving increased prioritization and additional investment in digital transformation among enterprises.

We recently spent time with the management teams at both Equinix and Digital Realty and are optimistic about their prospects. We believe Equinix, the premier global operator of network-dense, carrier-neutral colocation data centers, is well positioned to grow its cash flow per share by more than 10% annually for the next few years.”

4. CBRE Group, Inc. (NYSE:CBRE)

Number of Hedge Fund Holders: 48

One of the world’s largest commercial real estate services and investment firms, the CBRE Group Inc. (NYSE:CBRE) provides a wide range of services such as property management, investment management, valuation and appraisal, market research, and consulting.

On October 4, Raymond James analyst Patrick O’Shaughnessy revised down his price target for CBRE Group Inc. (NYSE:CBRE) from $100 to $95 but maintained a Strong Buy rating on the stock. Despite the recent upward trajectory of interest rates, which has postponed expectations for a rebound in capital markets activity this year and shifted the timeline to 2024, CBRE’s Global Workplace Solutions division remains a consistent source of revenue growth and stability for the company. The analyst asserts that CBRE’s robust cash flow and strong balance sheet position offer the company a range of choices for capital allocation.

According to Insider Monkey’s second quarter database, 48 hedge funds were bullish on CBRE Group, Inc. (NYSE:CBRE), compared to 41 funds in the prior quarter. Harris Associates is the biggest stakeholder of the company, with 14.7 million shares worth $1.18 billion.

3. Prologis, Inc. (NYSE:PLD)

Number of Hedge Fund Holders: 50

Prologis, Inc. (NYSE:PLD), headquartered in San Francisco, California, operates as a real estate investment trust specializing in logistics facilities. The company’s establishment took place in June 2011 through the merger of AMB Property Corporation and Prologis, creating one of the world’s largest industrial real estate companies. This industrial REIT is recognized as a top-tier dividend stock, boasting a track record of increasing its dividend at a compound annual rate of 15% since its initial public offering (IPO).

Prologis, Inc. (NYSE:PLD) announced its Q2 FFO on July 18, coming in at $1.83, surpassing Wall Street’s projections by $0.16. The company reported revenue of $2.45 billion, reflecting a 96% year-over-year increase and exceeding market consensus by $770 million.

According to Insider Monkey’s second quarter database, 50 hedge funds were bullish on Prologis, Inc. (NYSE:PLD), compared to 51 in the previous quarter. Jeffrey Furber’s AEW Capital Management is the largest shareholder of the company, with 2.52 million shares worth $309 million.

Here is what Aristotle Atlantic Partners has to say about Prologis, Inc. (NYSE:PLD) in its Q2 2023 investor letter:

“Prologis underperformed in the second quarter along with the real estate sector, as the appetite for risk in the broad market increased. Prologis’ results have shown less cyclicality during the recent downturn in the sector, so there is less scope for an earnings recovery as is the case in more beaten-down real estate companies. The company announced the acquisition of a 14 million square foot portfolio of industrial properties from Blackstone for $3.1 billion at the end of the second quarter.”

2. American Tower Corporation (NYSE:AMT)

Number of Hedge Fund Holders: 60

American Tower Corporation (NYSE:AMT) is a U.S.-based real estate investment trust that functions as a proprietor and overseer of wireless and broadcast communications infrastructure across numerous countries worldwide. Situated in Boston, Massachusetts, it achieved the 375th rank on the Fortune 500 list in 2022. As one of the most substantial global REITs, American Tower Corporation (NYSE: AMT) oversees a vast portfolio of approximately 223,000 communication assets worldwide. At present, the real estate company distributes a quarterly dividend of $1.62 per share, offering a yield of 4.06%.

As of June 2023, 60 hedge funds part of Insider Monkey’s database of 910 hedge funds were the firm’s investors. American Tower Corporation (NYSE:AMT)’s biggest hedge fund investor is Charles Akre’s Akre Capital Management through a stake worth $1.3 billion.

1. Blackstone Inc. (NYSE:BX)

Number of Hedge Fund Holders: 60

Blackstone Inc. (NYSE:BX) is an American alternative investment management firm headquartered in New York City. Blackstone’s private equity division has been among the leading investors in leveraged buyouts over the past three decades, and its real estate segment has been actively involved in acquiring commercial real estate.

Based on Insider Monkey’s first-quarter database, 60 hedge funds held positions in Blackstone Inc. (NYSE:BX), compared to 45 funds in Q1. Thomas Steyer’s Farallon Capital is the company’s largest shareholder, holding 3.05 million shares valued at $284.3 million.

2023 investor letter:

“Lastly, we also continued building two of our newer positions, the largest independent broker-dealer, LPL Financial Holdings Inc., which remains well positioned to win market share in a growing industry as advisors continue shifting to independent broker dealers; and the leading alternative asset manager, Blackstone Inc. (NYSE:BX), which we believe stands to benefit from the continued shift to alternative asset management. Jamie Dimon, JP Morgan’s CEO, described how the potential changes in regulatory requirements from banks (such as increasing capital rations to 20%) during the company’s most recent earnings could provide an additional boost for alternative asset managers: “This is great news for hedge funds, private equity, private credit, Apollo, Blackstone, and there’s dancing in the streets.”

Disclosure: None. You can also take a look at 12 Best Artificial Intelligence (AI) Stocks To Buy According to Hedge Funds and 11 Best Stocks to Buy in Falling Markets According to Hedge Funds.

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