5 Cheap REITs with Huge Upside

In this article, we discuss 5 cheap REITs with huge upside. If you want to see more stocks in this selection, check out 10 Cheap REITs with Huge Upside. 

5. Medical Properties Trust, Inc. (NYSE:MPW)

Number of Hedge Fund Holders: 28

Average Upside Potential Based on Analyst Ratings: 60.45% 

Average Analyst Price Target: $12.75

Medical Properties Trust, Inc. (NYSE:MPW) is a real estate investment trust that is self-managed and was established in 2003. Its main objective is to purchase and construct net-leased hospital facilities. Medical Properties Trust, Inc. (NYSE:MPW)’s financing strategy assists with acquisitions and recapitalizations and enables hospital operators to access the value of their real estate properties to finance improvements in facilities, technology upgrades, and other operational investments. It is one of the best cheap REITs stocks to watch. 

According to Truist analyst Michael Lewis, the future of Medical Properties Trust, Inc. (NYSE:MPW) is uncertain, which led him to revise the company’s price target from $14 to $8 and maintain a Hold rating on its shares on March 29. The analyst’s cautious outlook on the real estate investment trust is based on factors such as potential rent reductions, new investments, cost of capital, de-levering activity, and a possible dividend cut. 

According to Insider Monkey’s fourth quarter database, 28 hedge funds were bullish on Medical Properties Trust, Inc. (NYSE:MPW), compared to 23 funds in the earlier quarter. Dmitry Balyasny’s Balyasny Asset Management is the largest stakeholder of the company, with 7.5 million shares worth $84.3 million.

4. Piedmont Office Realty Trust, Inc. (NYSE:PDM)

Number of Hedge Fund Holders: 19

Average Upside Potential Based on Analyst Ratings: 61.97%

Average Analyst Price Target: $12.00

Piedmont Office Realty Trust, Inc. (NYSE:PDM) is a real estate investment trust that owns, manages, develops, redevelops, and operates Class A office properties in seven major Eastern U.S. office markets, with the majority of its revenue coming from the Sunbelt. It is one of the top cheap REIT stocks to monitor. 

At the end of June 2022, Truist analyst Michael Lewis maintained a Buy rating on Piedmont Office Realty Trust, Inc. (NYSE:PDM) but lowered the firm’s price target on the shares to $17 from $21 as part of a broader research note on Office REITs that assumes higher debt costs and a slower assumed occupancy recovery. 

According to Insider Monkey’s fourth quarter database, 19 hedge funds were bullish on Piedmont Office Realty Trust, Inc. (NYSE:PDM), compared to 16 funds in the preceding quarter. GLG Partners held the largest position in the company, comprising approximately 2 million shares worth $18.2 million. 

3. Safehold Inc. (NYSE:SAFE)

Number of Hedge Fund Holders: 10

Average Upside Potential Based on Analyst Ratings: 67.90% 

Average Analyst Price Target: $21.00

Safehold Inc. (NYSE:SAFE) is transforming real estate ownership by offering a ground lease capital solution that enables property owners to maximize the value of their land. By utilizing this approach, the company assists owners of high-quality properties in major markets throughout the United States, such as multifamily, office, industrial, hospitality, and mixed-use properties, to generate higher returns with less risk. Safehold is structured as a real estate investment trust. Safehold Inc. (NYSE:SAFE) is one of the best cheap REITs to watch. On March 16, Exane BNP Paribas initiated coverage of Safehold with an Outperform rating.

On March 30, iStar (NYSE:STAR) announced that it will conduct a reverse stock split, which involves combining each outstanding share of its common stock into 0.160 shares. This reverse split of iStar’s common stock will take place just before the iStar and Safehold Inc. (NYSE:SAFE) merger becomes effective.

According to Insider Monkey’s fourth quarter database, 10 hedge funds were long Safehold Inc. (NYSE:SAFE), compared to 11 funds in the prior quarter. John Khoury’s Long Pond Capital held the largest stake in the company, comprising 913,523 shares worth $26 million. 

Aristotle Small Cap Equity Strategy made the following comment about Safehold Inc. (NYSE:SAFE) in its Q4 2022 investor letter:

Safehold Inc. (NYSE:SAFE), is a real estate investment trust (REIT) focused on acquiring, owning, managing and capitalizing ground leases. We inherited shares of Safehold via a special dividend from existing holding iStar, which holds a meaningful stake in Safehold. We maintain our shares ahead of the anticipated business combination between the two entities, which will create the only self‐managed, pure‐play ground lease company in the public markets.”

2. AFC Gamma, Inc. (NASDAQ:AFCG)

Number of Hedge Fund Holders: 4

Average Upside Potential Based on Analyst Ratings: 70.69% 

Average Analyst Price Target: $20.81

AFC Gamma, Inc. (NASDAQ:AFCG) is involved in the creation, arrangement, approval, and funding of loans and debt securities for established businesses in the cannabis industry operating in states where medical and/or adult use of cannabis is legal. It is one of the top cheap REIT stocks to invest in. On March 29, AFC Gamma, Inc. (NASDAQ:AFCG) declared a $0.56 per share quarterly dividend, in line with previous. The dividend is payable on April 14, to shareholders of record on March 31. 

On March 8, TD Cowen maintained an Outperform rating on AFC Gamma, Inc. (NASDAQ:AFCG) but decreased the target price on the stock from $22 to $21. The analyst noted that due to a slower environment for lending in the cannabis industry, the company is now focusing on investing its capital into commercial real estate loans, with the goal of achieving a 50-50 split between CRE and cannabis by the end of the year. This pivot is seen as a positive move, as the credit quality of CRE loans is higher compared to those in the cannabis industry, the analyst wrote in a research note. 

According to Insider Monkey’s fourth quarter database, 4 hedge funds were bullish on AFC Gamma, Inc. (NASDAQ:AFCG), compared to 5 funds in the prior quarter. D E Shaw is the biggest position holder in the company, with 108,183 shares worth $1.70 million. 

1. Innovative Industrial Properties, Inc. (NYSE:IIPR)

Number of Hedge Fund Holders: 14

Average Upside Potential Based on Analyst Ratings: 86.26% 

Average Analyst Price Target: $138.80

Innovative Industrial Properties, Inc. (NYSE:IIPR) is a company based in Maryland that specializes in acquiring, owning, and managing properties that are leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. The company has chosen to be taxed as a real estate investment trust since the year ended December 31, 2017. On March 15, Innovative Industrial Properties, Inc. (NYSE:IIPR) declared a $1.80 per share quarterly dividend, in line with previous. The dividend is payable on April 14, to shareholders of record on March 31. 

On March 1, Eric Des Lauriers, an analyst at Craig-Hallum, decreased the company’s price target for Innovative Industrial Properties, Inc. (NYSE:IIPR) from $140 to $125 due to challenges the company is currently facing, including an influx of committed capital that has exceeded initial expectations. Despite this, the analyst still maintained a Buy rating on the shares.

According to Insider Monkey’s fourth quarter database, 14 hedge funds were long Innovative Industrial Properties, Inc. (NYSE:IIPR), compared to 12 funds in the prior quarter. Stuart J. Zimmer’s Zimmer Partners is the largest stakeholder of the company, with 2.4 million shares worth $247.7 million. 

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