Real estate investment trusts (REITs) are publicly traded companies that allow individual investors to buy shares in real estate portfolios that receive income from a variety of properties. They allow investors to easily invest in the real estate sector, which includes companies that own, develop, and manage residential, commercial, and industrial properties. Among other requirements, REITs are required to pay out at least 90% of their taxable income as dividends. A key REIT metric is funds from operations (FFO), a measure of earnings particular to the industry. Some big names within the sector include American Tower Corp. (AMT), Crown Castle International Corp. (CCI), and Prologis Inc. (PLD).

Many commercial real estate companies that own office buildings and retail space have been badly hurt by the COVID-19 pandemic and economic downturn, both due to layoffs and many corporate employees working from home. However, the U.S. government’s $1.9 trillion stimulus package, passed by Congress in March 2021, could fuel a rapid economic recovery, and along with it, a rebound in commercial real estate.

REITs, as represented by the Real Estate Select Sector SPDR ETF (XLRE), have underperformed the broader market. XLRE’s 31.3% total return over the past 12 months is below the Russell 1000 index, which has provided a total return of 46.3%, as of May 25. All statistics in the tables below are also as of May 25.

Here are the top 3 REITs with the best value, the fastest growth, and the most momentum.

These are the REITs with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value REITs
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Annaly Capital Management Inc. (
NLY)
9.23 12.9 3.0
AGNC Investment Corp. (
AGNC)
18.53 9.7 3.4
Brandywine Realty Trust (
BDN)
13.90 2.4 7.9

Source: YCharts

  • Annaly Capital Management Inc.: Annaly Capital Management invests in residential and commercial real estate. Its Residential Credit group focuses on non-agency residential mortgage assets, and its Commercial Real Estate group focuses on commercial mortgage, loans, securities, and other commercial real estate debt and equity investments. The company reported net income of $1.8 billion for Q1 2021, versus a net loss of $3.6 billion one year prior.
  • AGNC Investment Corp.: AGNC Investment invests mainly in residential mortgage-backed securities (MBS) whose interest payments and principal are guaranteed by a U.S. agency or the federal government. The company serves customers across the U.S.
  • Brandywine Realty Trust: Brandywine Realty Trust is a REIT that owns, leases, develops, and manages primarily office properties. These are mostly located in the Philadelphia, Austin, and Washington D.C. markets. It also has an ownership interest and operates a commercial real estate management services company. On May 18, the company’s board of directors declared a cash dividend of $0.19 per common share, payable on July 21 shareholders of record as of July 7, 2021.

These are the top REIT stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest Growing REITs
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Jones Lang LaSalle Inc. (
JLL)
204.14 10.5 1,870 -1.4
Weyerhaeuser Co. (
WY)
37.26 27.9 355.0 45.0
Kilroy Realty Corp. (
KRC)
70.00 8.2 1,050 6.5

Source: YCharts

  • Jones Lang LaSalle Inc.: Jones Lang LaSalle is a real estate and investment management service provider. The company provides services such as tenant representation, property management, leasing, finance, and valuation services to a variety of corporate and institutional clients globally.
  • Weyerhaeuser Co.: Weyerhaeuser is a forest products company that grows and harvests trees and develops real estate. The company also provides construction services and forest products. On April 30, the company announced the completion of its acquisition of 69,200 acres of Alabama timberlands for $149 million. At the same time, Weyerhaeuser announced an agreement to sell timberlands in the North Cascades region of Washington for $266 million.
  • Kilroy Realty Corp.: Kilroy Realty is a REIT that owns, develops, acquires, and operates Class A office properties in California and Washington state.

These are the REITs that had the highest total return over the last 12 months.

REITs with the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Simon Property Group Inc. (
SPG)
124.40 40.9 143.5
SL Green Realty Corp. (
SLG)
76.96 5.3 123.0
The Howard Hughes Corp. (
HHC)
104.22 5.7 120.6
Russell 1000 N/A N/A 46.3
Real Estate Select Sector SPDR ETF (XLRE) N/A N/A 31.3

Source: YCharts

  • Simon Property Group Inc.: Simon Property Group is a REIT that owns, develops, and manages malls, outlet centers, community shopping centers, and related properties. Net income attributable to common stockholders rose by 1.9% YOY even as total revenue fell by 8.4% for Q1 2021. Occupancy was 90.8% at its U.S. malls and premium outlets.
  • SL Green Realty Corp.: SL Green Realty is a fully integrated REIT focused on real estate in Manhattan. The company is engaged in the acquisition, development, ownership, management and operation of both commercial and residential real estate properties. On May 18, the company announced the sale of 635-641 Sixth Avenue for a gross sales price of $325.0 million. SL Green did not name the buyer in its announcement. The deal is expected to close in the current quarter.
  • The Howard Hughes Corp.: The Howard Hughes Corp. is a reall estate developer that manages shopping malls, mixed-use developments, and planned communities throughout the U.S. It runs its operations through these major segments: Operating Assets, Master Planned Communities; Seaport District; and Strategic Developments.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

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