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. 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 owning office buildings and retail space have been badly hurt by the COVID-19 pandemic and economic downturn as many corporate employees have begun to work from home.

REITs, as represented by the Real Estate Select Sector SPDR (XLRE), have dramatically underperformed the broader market. XLRE has provided a total return of -8.0% over the past 12 months, well below the Russell 1000's total return of 15.9%, as of October 26, 2020. All statistics in the tables below are as of October 27.

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

Best Value REITs

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
Brookfield Property REIT Inc. (BPYU) 14.90 0.7 1.4
Kimco Realty Corp. (KIM) 11.11 4.8 4.9
Brandywine Realty Trust (BDN) 9.41 1.6 5.4

Source: YCharts

  • Brookfield Property REIT Inc.: Brookfield Property is a REIT that owns, develops, builds, manages, and leases various commercial properties. Among the company's portfolio of properties are restaurants, malls, entertainment facilities, and parking areas.
  • Kimco Realty Corp.: Kimco is a REIT that owns and operates open-air shopping centers throughout the U.S. and Puerto Rico. Its properties are usually anchored by a supermarket and big box store selling consumer staples products.
  • Brandywine Realty Trust: Brandywine is a REIT that owns, manages, leases, acquires, and develops primarily suburban office properties. The company also owns an interest in and operates a commercial real estate management services company. Brandywine reported net income growth of 3,948.9% despite a 13.2% decline in revenue in Q3 2020, which ended September 30, 2020. The increase in net income was primarily driven by gains on the sale of real estate assets, but also got a boost from lower operating expenses. The company gave no guidance for 2021 due to the uncertain business climate arising from the pandemic.

Fastest Growing REITs

These are the REITs with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.

Fastest Growing REITs

 

Price ($) Market Cap ($B) EPS Growth (%)
Brandywine Realty Trust (BDN) 9.41 1.6 3,900
Kimco Realty Corp. (KIM) 11.11 4.8 755.0
Americold Realty Trust (COLD) 37.00 7.5 433.3

Source: YCharts

  • Brandywine Realty Trust: See above for company description.
  • Kimco Realty Corp.: See above for company description.
  • Americold Realty Trust: Americold Realty Trust provides temperature-controlled food warehousing as well as related services including consolidation, logistics, and shipment management. The company's customers include food producers, distributors, wholesalers, restaurants, and retailers. Americold recently announced that it has entered into an agreement to acquire privately held Agro Merchants Group for $1.74 billion from an investor group led by funds managed by Oaktree Capital Management L.P. The acquisition is expected to close late in Q4 2020 or early 2021.

REITs with the Most Momentum

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 (%)
CoStar Group Inc. (CSGP) 830.75 32.7 47.1
Equinix Inc. (EQIX) 770.48 68.2 38.4
SBA Communications Corp. (SBAC) 303.33 34.0 25.0
Russell 1000 N/A N/A 15.9
Real Estate Select Sector SPDR (XLRE) N/A N/A -8.0

Source: YCharts

  • CoStar Group Inc.: CoStar provides information, analytics, and online marketplaces for commercial real estate. The company's products include research and real-time data, a mobile and online real estate marketplace, comparative analytics for the hotel industry, and similar offerings. CoStar reported a 26.0% decline in net income even as revenue grew 20.6% in Q3 2020, which ended September 30, 2020. Operating expenses were 44.6% higher compared to the year-ago quarter, depressing net income.
  • Equinix Inc.: Equinix is a REIT that provides colocation space and related services. The company provides customers with access to a selection of business partners and solutions based on their colocation, interconnection, and managed IT service needs. Equinix announced at the beginning of October that it has completed its acquisition of 13 data centers in Canada from BCE Inc. (BCE.TO). The all-cash transaction, valued at $780 million, includes over 600 customers and approximately 1.2 million gross square feet of data center space.
  • SBA Communications Corp.: SBA Communications owns and operates wireless communications infrastructure. The company leases antenna space to various wireless service providers.