Real estate is an effective way for investors to hedge against inflation and can generate significant profits. Buying physical real estate can be difficult and expensive for individual investors, but you can easily invest in real estate by purchasing shares in real estate investment trusts (REITs). There are several different types of REITs, many of which pay large dividends. In addition to REITs, the real estate sector also includes management and development stocks that may not actually own real estate.
Here are the eight best real estate stocks to buy in 2024, according to analysts at CFRA Research.
stock | Implied upside from December 22 closing price |
Prologis Co., Ltd. (ticker: PLD) | 17.8% |
American Tower Corporation (AMT) | 11.1% |
Equinix Inc. (EQIX) | 11.9% |
Public storage (PSA) | 11.8% |
Well Tower Co., Ltd. (WELL) | 11.2% |
Coster Group Co., Ltd. (CSGP) | 7.5% |
VICI Properties Co., Ltd. (VICI) | 5.3% |
Alexandria Real Estate Equities Inc. (ARE) | 22.1% |
Prologis is an industrial REIT specializing in logistics real estate. Analyst Michael Elliott said Prologis’ strategically located distribution centers are in strong demand, and zoning laws limit competition in many of these areas. Elliott estimates Prologis’ current land portfolio generates about $40 billion in value and differentiates the REIT from its competitors. He said concerns about slowing e-commerce growth are overblown, especially given that e-commerce providers need additional industrial space just to meet current demand. Elliott expects sales to increase 10-12% in 2024. CFRA has a “buy” rating on PLD stock and a price target of $156 (versus the December 22 closing price of $132.40).
American Tower Corporation (AMT)
American Tower is a specialized REIT that operates the world’s largest independent portfolio of wireless communications and broadcast towers. Elliott said American Tower’s current valuation already factored in the risk of a recession in 2024, giving it upside potential if the economy remains strong. He said growth in mobile video, expansion of mid-spectrum 5G bands and unlimited data plans will be long-term demand drivers for American Tower. The international market could be the company’s biggest opportunity going forward, as even 4G penetration remains low in many parts of the world. CFRA has a “buy” rating on AMT stock, a price target of $239, and a closing price of $215.19 on December 22nd.
Equinix is a specialized REIT and the world’s largest data center operator. Elliott said Equinix has a unique opportunity to expand globally, given limited competition and limited data center supply. He said the expansion creates opportunities for growth and the company’s consistent revenue base creates a highly visible financial outlook that is exactly what income investors love. Equinix is also the data center partner of choice for many of the world’s largest technology companies. Elliott expects sales to increase 8% to 10% in 2024. CFRA rates EQIX stock “buy” and has a price target of $895 (versus the December 22 closing price of $799.68).
Public Storage is the largest owner of self-storage facilities in the U.S. Elliott said Public Storage has a diverse and high-quality portfolio of self-storage facilities. In addition to organic growth opportunities, the company is expanding through acquisitions. Elliott said Public Storage will acquire Simply Self Storage in September 2023 for $2.2 billion, which will increase the quality and breadth of Public Storage’s portfolio. He said Public Storage has a healthy balance sheet and expects revenue growth of 5% to 7% in 2024. CFRA has a “buy” rating on PSA stock and a target price of $333 for PSA stock, which had a closing price of $297.93 on December 22nd.
Welltower is a healthcare REIT that invests in healthcare facilities, including senior housing, specialty care facilities, and medical office buildings. The REIT is up 41.5% this year through Dec. 22, making it the best performer in 2023 among stocks on this list. Elliott said the senior housing market has continued to improve following the coronavirus pandemic and expects that trend to continue for at least the next 12 months. He said occupancy rates are increasing and Welltower’s pricing power is improving. The aging U.S. population will also support long-term demand. CFRA has a “buy” rating on Well stock, a $100 price target, and a December 22 closing price of $89.96.
CoStar is a real estate services company that operates an online real estate marketplace and provides research to the commercial real estate industry. Elliott said KoStar has built an impressive and resilient business model that allows it to thrive through the cyclical ups and downs of the real estate market. He said Homes.com is exceeding growth expectations, reporting 100 million unique users in September 2023. Elliott said CoStar will begin monetizing Homes.com in early 2024, increasing overall profit margins. He predicts 14% revenue growth in 2024. CFRA has a “buy” rating on CSGP stock and a target price of $94 for CSGP stock, which closed at $87.47 on December 22nd.
VICI Properties Co., Ltd. (VICI)
Vici Properties is a specialty REIT that owns gaming, hospitality and entertainment properties, including Caesars Palace in Las Vegas. Vici has acquired major real estate interests, including acquiring the remaining 49.9% interest in MGM Grand Las Vegas and Mandalay Bay Resort from Blackstone Real Estate Income Trust for $1.27 billion in January 2023. We are actively acquiring The dividend for VICI stock will be the highest at 5.3%. The yield of stocks on this list. Elliott said VICI owns best-in-class gaming assets that create significant value for investors. CFRA has a “buy” rating on VICI stock, a price target of $33, and a closing price of $31.34 on December 22nd.
Alexandria Real Estate Equities Inc. (ARE)
Alexandria Real Estate Equities owns real estate that includes office and laboratory space for the life sciences industry. The stock is down 9.3% this year through December 22nd, making it the worst performing stock on this list. Elliott said Alexandria is a market leader in life science real estate and expects continued strong demand due to the aging of the U.S. population and continued investment in new drug development. This unique property is also less susceptible to cyclical economic downturns, and Elliott says the company’s diverse tenant mix reduces risk. CFRA rates ARE stock as a “strong buy” and has a price target of $156, based on the December 22 closing price of $127.75.