Real property concern trusts (REITs) are publically traded companies that let idiosyncratic investors to buy shares successful existent property portfolios that person income from a assortment of properties. They let investors to easy put successful the real estate sector, which includes companies that own, develop, and negociate residential, commercial, and concern properties.
Among different requirements, REITs are required to wage retired astatine slightest 90% of their taxable income arsenic dividends. A cardinal REIT metric is funds from operations (FFO), a measurement of net peculiar to the industry. Some large names wrong the assemblage see American Tower Corp. (AMT), Crown Castle International Corp. (CCI), and Prologis Inc. (PLD).
The COVID-19 pandemic has importantly disrupted the commercialized existent property industry, arsenic workers astir the satellite adapted to moving from location and assorted lockdown measures person been enacted. Despite the economy's rebound the industry's retrieve has been uneven. Some analysts foretell a speedy betterment to pre-pandemic levels.
REITs, arsenic represented by an exchange-traded money (ETF)—the Real Estate Select Sector SPDR Fund (XLRE)—have narrowly outperformed the broader market. XLRE’s 38.8% full instrumentality implicit the past 12 months is conscionable supra the benchmark iShares Russell 1000 ETF (IWB), which has provided a full instrumentality of 35.5%. These marketplace show numbers and the statistic successful the tables beneath are arsenic of Sept. 22, 2021.
Here are the apical 3 REITs with the champion value, fastest growth, and astir momentum.
Best Value REITs
These are the REITs with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits tin beryllium returned to shareholders successful the signifier of dividends and buybacks, a debased P/E ratio shows you’re paying little for each dollar of nett generated.
| Price ($) | Market Cap ($B) | 12-Month Trailing P/E Ratio | |
| Annaly Capital Management Inc. (NLY) | 8.67 | 12.5 | 3.8 |
| AGNC Investment Corp. (AGNC) | 16.02 | 8.4 | 4.6 |
| New Residential Investment Corp. (NRZ) | 10.91 | 5.1 | 8.7 |
Source: YCharts
- Annaly Capital Management Inc.: Annaly Capital Management invests successful existent property and related assets, including bureau mortgage-backed securities (MBS), residential and commercialized existent estate, and middle-market lending. On Sept. 9, Annaly declared a Q3 2021 currency dividend of $0.22 per communal share. The dividend is payable Oct. 29 to shareholders of grounds arsenic of Sept. 30, 2021.
- AGNC Investment Corp.: AGNC Investment invests chiefly successful residential MBS connected a leveraged ground done collateralized borrowings. It uses an progressive portfolio absorption strategy to supply risk-adjusted returns.
- New Residential Investment Corp.: New Residential Investment invests successful the residential lodging sector. The institution owns owe servicing-related assets, residential loans, and akin investments. New Residential Investment announced connected Aug. 23 that it had completed the acquisition of owe originator and servicer Caliber Homes Loans Inc. The woody was initially announced connected April 14, 2021. The institution said it planned to bring unneurotic the owe platforms of Caliber and Newrez LLC, which is New Residential's wholly owned owe originator and servicer, Newrez LLC. The acquisition is expected to adhd a astir $150 cardinal unpaid rule equilibrium of owe servicing rights (MSRs), technological enhancements, and different benefits. Terms of the woody were not disclosed successful the announcement.
Fastest Growing REITs
These are the apical REITs arsenic ranked by a growth model that scores companies based connected a 50/50 weighting of their astir caller quarterly year-over-year (YOY) percentage revenue growth and their astir caller quarterly YOY earnings-per-share (EPS) growth. Both income and net are captious factors successful the occurrence of a company. Therefore, ranking companies by lone 1 maturation metric makes a ranking susceptible to the accounting anomalies of that 4th (such arsenic changes successful taxation instrumentality oregon restructuring costs) that whitethorn marque 1 fig oregon the different unrepresentative of the concern successful general. Companies with quarterly EPS oregon gross maturation of much than 2,500% were excluded arsenic outliers.
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| Weyerhaeuser Co. (WY) | 35.26 | 26.4 | 1,270 | 92.8 |
| Jones Lang LaSalle Inc. (JLL) | 234.78 | 11.9 | 1,220 | 22.5 |
| Sun Communities Inc. (SUI) | 194.56 | 22.6 | 60.7 | 100.0 |
Source: YCharts
- Weyerhaeuser Co.: Weyerhaeuser is simply a wood products institution that grows and harvests trees and develops existent estate. The institution besides provides operation services and wood products. On July 30, the institution announced that nett net soared 14-fold arsenic gross roseate astir 7%. successful Q2 2021 ended June 30, 2021. Adjusted EBITDA reached a grounds level. The nett show was driven by a important summation successful export income realizations and a much humble betterment successful export income volumes.
- Jones Lang LaSalle Inc.: Jones Lang LaSalle is simply a existent property and concern absorption work provider. The institution provides services specified arsenic tenant representation, spot management, leasing, finance, and valuation services to a assortment of firm and organization clients globally. On Sept. 13, the institution announced the assignment of Siddharth Taparia to main selling officer. Taparia volition beryllium liable for planetary selling strategy and each selling activities worldwide. Previously, Taparia was elder vice president and planetary caput of firm marque and acquisition selling astatine bundle institution SAP SE (SAP).
- Sun Communities Inc.: Sun Communities owns and operates manufactured-housing communities. The institution owns properties passim the Midwest and the Southeast regions of the United States, arsenic good arsenic Canada.
REITs with the Most Momentum
These are the REITs that had the highest full instrumentality implicit the past 12 months.
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Jones Lang LaSalle Inc. (JLL) | 234.78 | 11.9 | 137.8 |
| Simon Property Group Inc. (SPG) | 130.38 | 42.9 | 114.9 |
| CBRE Group Inc. (CBRE) | 93.73 | 31.5 | 101.8 |
| iShares Russell 1000 ETF (IWB) | N/A | N/A | 35.5 |
| Real Estate Select Sector SPDR Fund (XLRE) | N/A | N/A | 38.8 |
Source: YCharts
- Jones Lang LaSalle Inc.: See supra for institution description.
- Simon Property Group Inc.: Simon Property Group is simply a REIT that owns, develops, and manages malls, outlet centers, assemblage centers, and different related properties.
- CBRE Group Inc.: CBRE Group is simply a existent property work provider. The institution offers valuation, advisory, existent property investment, and spot absorption services. It focuses connected offices, hotels, gaming properties, multifamily residences, and information centers. In September, the institution announced it was the top-ranked steadfast for commercialized existent property concern income globally in the archetypal fractional of 2021, according to Real Capital Analytics. CBRE Group had a 23.7% marketplace stock crossed each spot types connected a worldwide ground during that period, astir doubly arsenic large arsenic the 2 adjacent biggest rivals, according to RCA.
The comments, opinions, and analyses expressed herein are for informational purposes lone and should not beryllium considered idiosyncratic concern proposal oregon recommendations to put successful immoderate information oregon follow immoderate concern strategy. While we judge the accusation provided herein is reliable, we bash not warrant its accuracy oregon completeness. The views and strategies described successful our contented whitethorn not beryllium suitable for each investors. Because marketplace and economical conditions are taxable to accelerated change, each comments, opinions, and analyses contained wrong our contented are rendered arsenic of the day of the posting and whitethorn alteration without notice. The worldly is not intended arsenic a implicit investigation of each worldly information regarding immoderate country, region, market, industry, investment, oregon strategy.
Article Sources
Investopedia requires writers to usage superior sources to enactment their work. These see achromatic papers, authorities data, archetypal reporting, and interviews with manufacture experts. We besides notation archetypal probe from different reputable publishers wherever appropriate. You tin larn much astir the standards we travel successful producing accurate, unbiased contented successful our editorial policy.
English (US) ·