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., Crown Castle International Corp., and Prologis Inc.
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 recovery, the industry’s recovery has been uneven: some companies chose new office locations, others repurposed existing spaces, and others redesigned their existing space. Meanwhile, the U.S. housing market–which saw home prices grow by more than 34% over the past two years–may be showing signs of cooling.
REITs, as represented by an exchange-traded fund (ETF)–the Real Estate Select Sector SPDR Fund (XLRE)–have outperformed the broader market. XLRE’s 4.0% total return over the past 12 months bested the benchmark Russell 1000 index, which has provided a total return of -4.2%. These market performance numbers and the statistics in the tables below are as of May 27, 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)
New Residential Investment Corp. (NRZ)
Apartment Income REIT Corp. (AIRC)
Annaly Capital Management Inc.: Annaly Capital invests in real estate and related assets, including agency mortgage-backed securities (MBS), residential and commercial real estate, and middle-market lending. On May 17, Annaly announced that it had priced a public offering of 100 million shares of its common stock for expected gross proceeds of roughly $645 million less expenses. The underwriters also have a 30-day option to purchase up to an additional 15 million shares each.
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.
Apartment Income REIT Corp.: Apartment Income REIT, known as AIR Communities, is a REIT that owns and operates apartment housing communities in the biggest markets throughout the U.S. It owns 84 apartment communities in a dozen states and the District of Columbia. On April 27, the company announced a quarterly cash dividend of $0.45 per share of Class A common stock. The dividend is payable on May 31 to shareholder of record on May 20, 2022.
Fastest Growing REITs
These are the top REITs as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
Market Cap ($B)
EPS Growth (%)
Revenue Growth (%)
Crown Castle International Corp. (CCI)
Vornado Realty Trust (VNO)
Realty Income Corp. (O)
Crown Castle International Corp.: Crown Castle International is a REIT that operates and leases communication infrastructure. Its assets include over 40,000 cell towers and more than 80,000 miles of fiber throughout the U.S. The company reported financial results for Q1 2022 on April 20. Crown Castle’s net income surged more than sevenfold on a 17.3% increase in revenue year-over-year (YOY). A strong 5G leasing market and growth in site rental revenue helped fuel the gains.Vornado Realty Trust: Vornado Realty Trust is a REIT that owns, develops, and manages retail and office properties. The company’s portfolio includes over 26 million feet of property in New York City, San Francisco, and Chicago.Realty Income Corp.: Realty Income is a REIT that owns and manages commercial properties across the U.S. and in Europe. The company seeks investments with the goal of delivering dependable monthly dividends. On May 17, Realty income announced its 623rd consecutive common stock monthly dividend, of $0.247 per share. The dividend is payable on June 15 to shareholders of record as of June 1, 2022.
These are the REITs that had the highest total return over the last 12 months.
Market Cap ($B)
12-Month Trailing Total Return (%)
American Campus Communities Inc. (ACC)
Iron Mountain Inc. (IRM)
Extra Space Storage Inc. (EXR)
Real Estate Select Sector SPDR Fund (XLRE)
American Campus Communities Inc.: American Campus Communities is a REIT that develops, manages, and owns student housing properties. Including third-party managed properties, American Campus Communities owns over 200 properties, the vast majority which are student housing. In its Q1 2022 earnings report, released on April 25, the company said that net income attributable to ACC Inc. and subsidiaries common shareholders more than doubled on 17.6% revenue growth YOY. Performance was driven by improvement in operations for the 2021-2022 academic year compared with the prior year, which was negatively impacted by the COVD-19 pandemic.Iron Mountain Inc.: Iron Mountain is a REIT that invests in data center properties and other properties dedicated to information storage and retrieval. The company also offers records and information management services. Its customers include businesses in the legal, financial, health care, insurance, and energy industries.Extra Space Storage Inc.: Extra Space Storage owns, operates, manages, and develops self-storage properties. The company operates over 2,100 properties comprising about 1.5 million units. It also provides tenant reinsurance products. Extra Space Storage announced on May 26 a quarterly dividend of $1.50 per share of common stock for Q2 2022. The dividend is payable on June 30 to shareholders of record as of June 15, 2022.
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 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 in 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.
McKinsey & Company. “Workplace real estate in the COVID-19 era: From cost center to competitive advantage.”
YCharts. “Financial Data.”
Annaly Capital Management Inc. “Annaly Capital Management, Inc. Announces Pricing of Public Offering of Common Stock.”
Apartment Income REIT Corp. “Apartment Income REIT Corp. Announces Quarterly Common Dividend of $0.45 Per Share.”
Crown Castle International Corp. “Crown Castle Reports First Quarter 2022 Results and Increases Outlook for Full Year 2022.”
Realty Income Corp. “623rd Consecutive Common Stock Monthly Dividend Declared By Realty Income.”
American Campus Communities Inc. “American Campus Communities, Inc. Reports First Quarter 2022 Financial Results.”
Extra Space Storage Inc. “Extra Space Storage Inc. Announces 2nd Quarter 2022 Dividend.”
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