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 invest easily 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: the corporate office sector generally has performed worse than residential real estate and apartments. Consumers, too, have been disrupted. For example, workers who are returning to cities to live and work 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 dramatically outperformed the broader market. XLRE’s 31.3% total return over the past 12 months exceeded the benchmark Russell 1000 index, which has provided a total return of 15.0%. These market performance numbers and the statistics in the tables below are as of Jan. 20, 2022.
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 that you’re paying less for each dollar of profit generated.
Market Cap ($B)
12-Month Trailing P/E Ratio
Annaly Capital Management Inc. (NLY)
AGNC Investment Corp. (AGNC)
New Residential Investment Corp. (NRZ)
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 Dec. 14, the company announced that Ilker Ertas had been promoted to chief investment officer effective immediately from his previous position as head of securitized products since 2015. He succeeds David L. Finkelstein, who held the dual roles of chief executive officer (CEO) and chief investment officer until Dec. 14.
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.
New Residential Investment Corp.: New Residential Investment is a public REIT investing in the residential housing sector. The company’s portfolio includes mortgage servicing-related assets, residential loans, non-agency securities, and similar investments. It also owns a mortgage originator and servicer. On Dec. 20, New Residential Investment announced that it had completed the acquisition of business purpose lender Genesis Capital LLC and a related loan portfolio. At the time of the announcement, Genesis was expected to originate roughly $2 billion of loans in 2021. The acquisition is expected to help Genesis to accelerate its growth in the U.S. housing market, especially in the build-to-rent space sector. The terms of the acquisition were not disclosed.
These are the top REITs as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
Market Cap ($B)
EPS Growth (%)
Revenue Growth (%)
Regency Centers Corp. (REG)
Sun Communities Inc. (SUI)
Duke Realty Corp. (DRE)
Regency Centers Corp.: Regency Centers is an REIT that owns and operates neighborhood retail centers that are anchored by grocery stores. The company’s properties are located throughout the United States.
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. For Q3 2021, ended Sept. 30, Sun Communities reported that net income nearly tripled YOY as total revenues increased by 70.9%. A major driver of the results was strong growth in home sales volume.
Duke Realty Corp.: Duke Realty owns, develops, and manages logistics and industrial properties across the United States. 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 (%)
Extra Space Storage Inc. (EXR)
Life Storage Inc. (LSI)
Simon Property Group Inc. (SPG)
Real Estate Select Sector SPDR Fund (XLRE)
Extra Space Storage Inc.: Extra Space Storage is a self-storage management company that owns and operates facilities across the United States.
Life Storage Inc.: Life Storage owns and operates self-storage properties in dozens of U.S. states. The company operates over 1,000 storage facilities. In early January, Life Storage announced that it would increase its quarterly common stock dividend from $0.86 per share to $1.00 per share. The increase is effective with the dividend paid on Jan. 26 to shareholders of record as of Jan. 14, 2022.
Simon Property Group Inc.: Simon Property Group is a REIT that owns, develops, and manages malls and other shopping, dining, and mixed-use destinations. The company operates properties across North America, Europe, and Asia.
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