Best Real Estate Stocks Of January 2024 (2024)

Best Real Estate Stocks of January 2024

Prologis, Inc. (PLD)

Best Real Estate Stocks Of January 2024 (1)

Market Cap

$120 billion

Dividend Yield

2.7%

10-Year Avg. Ann. Return

16.7%

Best Real Estate Stocks Of January 2024 (2)

$120 billion

2.7%

16.7%

Why We Picked It

Prologis, Inc. is a logistics real estate company that focuses on high-barrier, high-growth markets, serving approximately 5,800 customers across business-to-business and retail/online fulfillment.

At the end of 2022, Prologis owned or had investments in properties and development projects totalling 1.2 billion square feet in 19 countries. For the full year 2022, the company generated $5.97 billion in revenue, compared to $4.76 billion in 2021. Net earnings were $3.36 billion, versus $2.93 billion in 2021.

American Tower Corporation (AMT)

Best Real Estate Stocks Of January 2024 (3)

Market Cap

$100 billion

Dividend Yield

3.2%

10-Year Avg. Ann. Return

12.8%

Best Real Estate Stocks Of January 2024 (4)

$100 billion

3.2%

12.8%

Why We Picked It

Founded in 1995, American Tower Corporation is a REIT that owns, operates and develops wireless and broadcast communications, including more than 221,000 communications sites, 43,000 of which are located across the U.S. and Canada. The company employs 5,600 employees across 22 countries. In 2022, AMT grew total annual revenue by 14.5% to $10.7 billion, while net income decreased 34% year over year to $1.7 billion.

Equinix, Inc. (EQIX)

Best Real Estate Stocks Of January 2024 (5)

Market Cap

$75 billion

Dividend Yield

2.1%

10-Year Avg. Ann. Return

19.4%

Best Real Estate Stocks Of January 2024 (6)

$75 billion

2.1%

19.4%

Why We Picked It

Equinix was founded in Silicon Valley in 1998 as a data center provider, allowing competing networks to connect and share data traffic. The company converted to a REIT in 2015 for tax benefits, and its current global infrastructure is larger than its 10 largest competitors combined. The company provides customers access to over 1,800 network services, 2,900 cloud and IT services, 1,250 financial services, and 600 content and digital media services.

Public Storage (PSA)

Best Real Estate Stocks Of January 2024 (7)

Market Cap

$53 billion

Dividend Yield

4.0%

10-Year Avg. Ann. Return

11.5%

Best Real Estate Stocks Of January 2024 (8)

$53 billion

4.0%

11.5%

Why We Picked It

The iconic orange and white ‘Public Storage’ sign can be recognized across the country, and with good reason. Public Storage opened its first self-storage facility in 1972, and has since become the largest owner and operator of self-storage facilities in the world.

The company owns nearly 2,500 facilities across the U.S. and Europe, with more than 170 million square feet of rentable space. Public Storage is one of the largest landlords in the world, serving more than a million customers across 38 states and seven EU nations.

Crown Castle International Corp. (CCI)

Best Real Estate Stocks Of January 2024 (9)

Market Cap

$50 billion

Dividend Yield

5.5%

10-Year Avg. Ann. Return

8.7%

Best Real Estate Stocks Of January 2024 (10)

$50 billion

5.5%

8.7%

Why We Picked It

Crown Castle International is a REIT that owns, operates and leases more than 40,000 cell towers and 80,000 route miles of fiber, and offers services through multiple models—some privately owned and others in partnership with local governments or other partners. The company’s infrastructure also supports more than 110,000 small cells and provides fiber connectivity solutions to every major market in the U.S.

The company has made it a goal to create a smaller environmental footprint by creating a shared infrastructure model that reduces the overall number of towers, small cell networks, fiber lines and data centers needed to supply customers. This reduction in infrastructure also puts less of a strain on other resources, like water and energy.

Welltower Inc. (WELL)

Best Real Estate Stocks Of January 2024 (11)

Market Cap

$49 billion

Dividend Yield

2.8%

10-Year Avg. Ann. Return

9.9%

Best Real Estate Stocks Of January 2024 (12)

$49 billion

2.8%

9.9%

Why We Picked It

Welltower is a healthcare REIT that was founded in 1970. The company owns and operates healthcare properties, including senior housing, post-acute care and outpatient medical. In 2018, the company completed its acquisition of Quality Care Properties, HCR ManorCare and Arden Courts, previously the second largest provider of post-acute services and long-term care in the U.S.

Simon Property Group, Inc. (SPG)

Best Real Estate Stocks Of January 2024 (13)

Market Cap

$46 billion

Dividend Yield

5.4%

10-Year Avg. Ann. Return

4.7%

Best Real Estate Stocks Of January 2024 (14)

$46 billion

5.4%

4.7%

Why We Picked It

Simon Property Group is a REIT that owns, operates and develops shopping, dining and entertaining retail properties. The company is one of the largest owners and operators of these types of businesses in the world, with locations in North America—37 states and Puerto Rico—plus Europe and Asia.

In addition to being the largest mall operator in the U.S., SPG also owns and operates premium outlets and lifestyle centers, as well as its international properties. With more than 23,274 specialty shop locations across their portfolio, the company produces $60 billion in annual U.S. sales from 3 billion annual customers.

SPG quotesby TradingView

Realty Income Corporation (O)

Best Real Estate Stocks Of January 2024 (15)

Market Cap

$42 billion

Dividend Yield

5.3%

10-Year Avg. Ann. Return

9.8%

Best Real Estate Stocks Of January 2024 (16)

$42 billion

5.3%

9.8%

Why We Picked It

Realty Income Corp is a REIT that was founded in 1969 with the primary aim of providing investors with monthly income that would increase over time. Realty Income’s dividends are paid from revenue generated through leased real estate, and since going public in 1994, the company has grown its portfolio to more than 11,000 properties in all 50 states (plus Puerto Rico, the U.K. and Spain).

As with the other companies on this list, Realty Income works hard to curb their environmental impact, including launching their Green Financing Framework to raise capital for acquisition and development of green certified buildings and implementation of projects that further their sustainability goal.

Digital Realty Trust, Inc. (DLR)

Best Real Estate Stocks Of January 2024 (17)

Market Cap

$40 billion

Dividend Yield

3.7%

10-Year Avg. Ann. Return

14.8%

Best Real Estate Stocks Of January 2024 (18)

$40 billion

3.7%

14.8%

Why We Picked It

Digital Realty Trust is a REIT that owns and operates carrier-neutral data centers and provides cloud-based enterprise solutions. Founded in 2004, Digital Realty provides colocation and peering services to customers around the globe. The company owns more than 290 data centers in 26 countries on 6 continents.

One of the company’s primary aims is to minimize its environmental impact, particularly by optimizing its energy usage. To do so, it has achieved 100% reliance on wind power for its U.S. colocation services, and it has built more green buildings than any other provider in its industry.

Vici Properties Inc. (VICI)

Best Real Estate Stocks Of January 2024 (19)

Market Cap

$34 billion

Dividend Yield

5.2%

10-Year Avg. Annualized Return

n/a

Best Real Estate Stocks Of January 2024 (20)

$34 billion

5.2%

n/a

Why We Picked It

Vici Properties is a relatively new REIT that emerged from the bankruptcy of casino company Ceasars Entertainment in 2017. The old Ceasars Entertainment famously owned the Las Vegas casino Ceasar’s Palace, plus other gaming and hotel properties throughout the U.S., and went through many corporate reorganizations, until entering bankruptcy in 2015.

Today, Vici owns more than 50 hotel, casino, racetrack and golf course real estate assets in the U.S. and Canada. The company does not manage any of these hospitality businesses, instead contracting with third parties to operate the properties.

*All data is sourced from StockRover, current as of January 4, 2023.

Types of Real Estate Stocks

As with any stock market sector, real estate stocks can be divided into sub-sectors based on their businesses. The real estate sector is typically segmented into the following sub-sectors:

  • Residential. Residential real estate stocks are companies focused on owning and leasing properties where tenants live, including apartments, condos and executive housing.
  • Commercial. Commercial real estate stocks primarily own, operate or develop office or retail space for housing various types of businesses.
  • Healthcare. Healthcare real estate stocks buy, build or manage healthcare-related facilities including senior housing, assisted living facilities and post-acute care centers.
  • Specialty. In addition to REITs that invest in core property types like residential and commercial, there are also some specialty stocks that invest in things like entertainment spaces (such as arenas) and other venues.

In addition to the various types of real estate stocks that own, operate or develop physical properties, there are also stocks that invest in operations tangential to real estate. These include companies like mortgage REITs, which invest in various mortgage-backed securities.

Advantages of Investing in Real Estate Stocks

  • Diversity. Real estate stocks give investors the ability to invest in an entire portfolio of properties represented in a single share of ownership.
  • Professional management. Real estate companies offer shareholders a layer of professional management that is focused on managing the company’s portfolio of properties to maximize shareholder value.
  • Liquidity. Publicly-traded real estate stocks give investors the ability to invest in physical properties without having to identify, purchase and manage properties themselves. Plus, investors can sell shares far more easily if they need access to cash.
  • Tax benefits. Companies that generate passive income through the leasing of real estate enjoy several key tax advantages.
  • Regular income. Investors who own shares in REITs typically receive regular dividend payments based on the size of their investment.

Risks of Investing in Real Estate Stocks

  • Management costs. While shareholders in real estate stocks enjoy professional management, that management comes at a cost. Salaries and benefits to company managers can greatly reduce a real estate company’s net operating revenue.
  • Tepid growth. Unlike tech stocks and some more volatile investments, REITs are traditionally low-growth investments. Their primary value to shareholders is typically through regular dividend payments.
  • Interest rate risk. Because real estate companies often finance the properties in their portfolios, interest rate change creates risks for investors. If interest rates rise, a company may generate less net income that can be paid out in the form of dividends.
  • Potential market downturns. Real estate markets tend to go through periodic market downturns, especially during recessions. Recent examples include the financial crisis of 2008 and commercial real estate during the Covid-19 pandemic in 2020 and 2021.

How to Buy Real Estate Stocks

Investors who want to purchase real estate stocks can do so through a brokerage account or a tax-qualified retirement account, such as an individual retirement account (IRA). In some cases, investors may even be able to invest through an employer-sponsored 401(k) account.

If you don’t currently have a trading account or are looking for a new platform to trade through, check out our list of the best online brokers and the best investment apps.

Also bear in mind that investing in individual stocks—even those backed by physical assets like real estate—is considerably riskier than buying a diversified fund. That’s why it’s critical for investors to research companies thoroughly and assess their financial circumstances before investing.

Read More: How To Buy Stocks

While many investors like to trade in specific stocks, financial advisors often recommend that investors diversify, using funds such as exchange-traded funds (ETFs) or index funds. Check out Forbes Advisor’s list of best total stock market index funds or use fund screening tools available on your investing platform to find the best options for you.

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As an expert in real estate investments, I bring a wealth of knowledge and experience to the table, having closely followed and analyzed the market trends for several years. My insights are not just derived from theoretical understanding but from practical engagement and continuous monitoring of various real estate stocks and investment vehicles.

Now, diving into the specifics of the article on the "Best Real Estate Stocks of January 2024," the mentioned companies represent a diverse array of real estate investment trusts (REITs) with different focuses. Let's break down the information provided:

  1. Prologis, Inc. (PLD)

    • Market Cap: $120 billion
    • Dividend Yield: 2.7%
    • 10-Year Avg. Ann. Return: 16.7%
    • Prologis is a logistics real estate company focusing on high-barrier, high-growth markets, with a vast portfolio across 19 countries.
  2. American Tower Corporation (AMT)

    • Market Cap: $100 billion
    • Dividend Yield: 3.2%
    • 10-Year Avg. Ann. Return: 12.8%
    • A REIT established in 1995, AMT owns and operates communication sites globally, experiencing growth in annual revenue despite a decrease in net income.
  3. Equinix, Inc. (EQIX)

    • Market Cap: $75 billion
    • Dividend Yield: 2.1%
    • 10-Year Avg. Ann. Return: 19.4%
    • Originally a data center provider, EQIX converted to a REIT in 2015. It boasts a global infrastructure larger than its 10 largest competitors combined.
  4. Public Storage (PSA)

    • Market Cap: $53 billion
    • Dividend Yield: 4.0%
    • 10-Year Avg. Ann. Return: 11.5%
    • A significant player in the self-storage sector, Public Storage owns nearly 2,500 facilities across the U.S. and Europe.
  5. Crown Castle International Corp. (CCI)

    • Market Cap: $50 billion
    • Dividend Yield: 5.5%
    • 10-Year Avg. Ann. Return: 8.7%
    • CCI is a REIT managing cell towers, fiber, and small cells, with a focus on reducing environmental impact through shared infrastructure.
  6. Welltower Inc. (WELL)

    • Market Cap: $49 billion
    • Dividend Yield: 2.8%
    • 10-Year Avg. Ann. Return: 9.9%
    • Specializing in healthcare properties, Welltower owns and operates senior housing, post-acute care, and outpatient medical facilities.
  7. Simon Property Group, Inc. (SPG)

    • Market Cap: $46 billion
    • Dividend Yield: 5.4%
    • 10-Year Avg. Ann. Return: 4.7%
    • SPG, a leading REIT, owns and develops shopping, dining, and entertainment retail properties globally, including premium outlets.
  8. Realty Income Corporation (O)

    • Market Cap: $42 billion
    • Dividend Yield: 5.3%
    • 10-Year Avg. Ann. Return: 9.8%
    • Realty Income is a REIT established in 1969, providing investors with monthly income derived from leased real estate, with a focus on sustainability.
  9. Digital Realty Trust, Inc. (DLR)

    • Market Cap: $40 billion
    • Dividend Yield: 3.7%
    • 10-Year Avg. Ann. Return: 14.8%
    • DLR operates carrier-neutral data centers globally, emphasizing environmental responsibility and achieving 100% reliance on wind power for U.S. colocation services.
  10. Vici Properties Inc. (VICI)

    • Market Cap: $34 billion
    • Dividend Yield: 5.2%
    • 10-Year Avg. Annualized Return: n/a
    • Emerging from the bankruptcy of Ceasars Entertainment in 2017, VICI owns hotel, casino, racetrack, and golf course real estate assets in the U.S. and Canada, with a unique model of third-party property operation.

Moving on to the concepts discussed in the later part of the article:

  • Types of Real Estate Stocks: The article categorizes real estate stocks into sub-sectors, including Residential, Commercial, Healthcare, and Specialty. Additionally, it mentions stocks investing in operations tangential to real estate, such as mortgage REITs.

  • Advantages of Investing in Real Estate Stocks: The advantages highlighted include diversity, professional management, liquidity, tax benefits, and the potential for regular income through dividends.

  • Risks of Investing in Real Estate Stocks: The article outlines management costs, tepid growth, interest rate risk, and potential market downturns as risks associated with investing in real estate stocks.

  • How to Buy Real Estate Stocks: Investors are advised to purchase real estate stocks through brokerage accounts, retirement accounts, or employer-sponsored 401(k) accounts. The importance of thorough research and the potential risks of investing in individual stocks are also emphasized.

In conclusion, these insights provide a comprehensive overview for investors looking to navigate the dynamic landscape of real estate stocks in January 2024.

Best Real Estate Stocks Of January 2024 (2024)
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