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).
The COVID-19 pandemic has significantly disrupted the commercial real estate industry, as workers around the world have adapted to working from home and various lockdown measures have been enacted. Despite the economy’s rebound, the industry’s recovery has been uneven. Workers who are returning to cities to live and work, for example, are now encountering soaring prices for privately owned apartments and commercial apartments – prices that are dramatically higher than when they left.
REITs, as represented by an exchange-traded fund (ETF)–the Real Estate Select Sector SPDR Fund (XLRE)–have outperformed the broader market. XLRE’s 40.5% total return over the past 12 months exceeded the benchmark Russell 1000 index, which has provided a total return of 28.1%. These market performance numbers and the statistics in the tables below are as of Dec. 10, 2021.
Here are the top three REITs with the best value, fastest growth, and 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.
Annaly Capital Management Inc.: Annaly Capital Management invests in real estate and related assets, including agency mortgage-backed securities (MBS), residential and commercial real estate, and middle-market lending. On Nov. 10, Annaly Capital Management announced quarterly dividends on its Series F Preferred Stock, Series G Preferred Stock, and Series I Preferred Stock. All of these dividends are payable on Dec. 31 to preferred shareholders of record as of Dec. 1, 2021.
AGNC Investment Corp.: AGNC Investment invests mainly in residential MBS on a leveraged basis through collateralized borrowings. It uses an active portfolio management strategy to provide risk-adjusted returns. For Q3 2021 ended Sept. 30, AGNC Investment reported a 70.6% year-over-year (YOY) decline in net income attributable and declining net interest income. The company said that uncertainty regarding the outlook for the economy and interest rates affected its performance.
SL Green Realty Corp.: SL Green Realty invests in office properties in the New York metropolitan area.
These are the top REITs 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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
Market Cap ($B)
EPS Growth (%)
Revenue Growth (%)
Regency Centers Corp. (REG)
Sun Communities Inc. (SUI)
Duke Realty Corp. (DRE)
Regency Centers Corp.: Regency Centers is a REIT that owns and operates neighborhood retail centers that are anchored by grocery stores. The company’s properties are located throughout the U.S. Regency Centers reported results on Nov. 4 for Q3 2021 ended Sept. 30. For that period, net income attributable to common shareholders skyrocketed by more than nine-fold YOY as revenue surged.
Sun Communities Inc.: Sun Communities owns and operates manufactured-housing communities, recreational vehicle resorts, and marinas. The company owns properties throughout the Midwest and the Southeast regions of the United States, as well as Canada. The company announced on Nov. 15 that it would acquire Park Holidays U.K. for approximately ?950 million ($1.3 billion). Park Holidays owns and operates 40 holiday communities throughout the U.K. The acquisition dramatically expands Sun Communities’ operations in the region.
Duke Realty Corp.: Duke Realty owns, develops, and manages logistics and industrial properties across the U.S. The company also provides leasing, property management, construction, and related services.
These are the REITs that had the highest total return over the last 12 months.
Market Cap ($B)
12-Month Trailing Total Return (%)
Life Storage Inc. (LSI)
Extra Space Storage Inc. (EXR)
Mid-America Apartment Communities Inc. (MAA)
Russell 1000 (IWB)
Real Estate Select Sector SPDR Fund (XLRE)
Life Storage Inc.: Since 1985, Life Storage Inc. has owned and operated self-storage properties across 34 states. The company has also grown its third-party management platform through which it managed 357 facilities as of the end of Q3 fiscal year 2021. Life Storage Inc. posted strong earnings and revenue growth for the quarter ended Sept. 30, 2021, fueled by record seasonal occupancy and robust pricing power.
Extra Space Storage Inc.: Extra Space Storage Inc. is a self-storage management company that owns and operates facilities across the United States. As of Sept. 30, 2021, the company had 2,054 properties comprising 1.5 million units and about 159 million square feet of rentable space. In mid-November, the company was recognized as a sustainability leader following its environmental, social, and governance initiatives in the self-storage sector.
Mid-American Apartment Communities Inc.: MAA is a real estate investment trust that acquires, owns, manages, develops, and renovates quality apartment communities in Mid-Atlantic, Southeast, and Southwest regions. In its report for Q3 2021, the company said its strong growth during the quarter is likely to continue into 2022 due to robust demand for apartment housing and strong pricing trends across all its markets.
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