Real estate investments can be an excellent way to earn returns, generate cash flow, hedge against inflation and diversify an investment portfolio. However, buying physical properties can be costly, difficult and risky for an individual.
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Instead, investors can buy shares of diversified real estate investment trusts, or REITs. REITs are public companies that own large portfolios of real estate, and many of them also pay sizable dividends. There are many different types of REITs, providing investors access to residential, commercial and specialty real estate. Here are 10 of the best REITs to buy in 2025, according to Morningstar analysts:
| REIT Stock | Forward Dividend Yield* | Upside Potential* |
| Realty Income Corp. (ticker: O) | 5.6% | 33.0% |
| Crown Castle Inc. (CCI) | 6.0% | 29.5% |
| Invitation Homes Inc. (INVH) | 3.3% | 23.1% |
| Sun Communities Inc. (SUI) | 3.0% | 39.5% |
| Healthpeak Properties Inc. (DOC) | 5.3% | 35.1% |
| Equity LifeStyle Properties Inc. (ELS) | 2.7% | 8.9% |
| Host Hotels & Resorts Inc. (HST) | 4.4% | 33.3% |
| Federal Realty Investment Trust (FRT) | 3.8% | 24.9% |
| Americold Realty Trust Inc. (COLD) | 3.4% | 35.9% |
| Kilroy Realty Corp. (KRC) | 5.2% | 43.9% |
*As of Nov. 8. **As of Nov. 7 close.
Realty Income Corp. (O)
Realty Income is a retail REIT that owns, develops and manages U.S. retail real estate with a focus on single-tenant buildings. It is the largest triple-net REIT in the U.S., meaning tenants pay all property expenses, including real estate taxes, maintenance and building insurance. Realty Income has a 5.6% dividend yield and makes monthly dividend payments, making it an attractive income source. Analyst Kevin Brown says Realty Income’s retail tenants are focused on defensive segments that are service-oriented or insulated from e-commerce competition. Morningstar has a “buy” rating and $75 fair value estimate for O stock, which closed at $56.38 on Nov. 7.
Crown Castle Inc. (CCI)
Crown Castle International is a specialty REIT that owns and operates wireless communications towers. The REIT pays a 6% dividend, the highest on this list. Analyst Samuel Siampaus says carrier upgrade spending has been lackluster, tower activity has been mediocre and Sprint-related churn has weighed on Crown Castle’s growth. However, he says the REIT is attractively valued and leasing activity has been healthy. Siampaus says Crown Castle is taking the necessary steps to preserve its core tower business and review and refine its fiber segment. Morningstar has a “buy” rating and $135 fair value estimate for CCI stock, which closed at $104.21 on Nov. 7.
Invitation Homes Inc. (INVH)
Invitation Homes owns, operates and leases single-family U.S. homes in the starter and move-up categories. Brown says Invitation has a geographically diversified portfolio, including properties in the western U.S., Florida and throughout the Southeastern region. Because the cost of renting is below the cost of homeownership in many of these markets, Brown says Invitation can implement rent hikes without taking a major hit to occupancy rates. In addition, the company can hire its own maintenance and repair technicians to service its properties, helping it control costs. Morningstar has a “buy” rating and $41 fair value estimate for INVH stock, which closed at $33.30 on Nov. 7.
Sun Communities Inc. (SUI)
Sun Communities owns and operates manufactured housing communities, primarily in the Midwest and Southeast. Brown says Sun has expanded its real estate holdings significantly in the past 10 years, targeting investments that are ideal for vacation properties or second homes. Nearly half of Sun’s portfolio is located in Michigan or Florida near major bodies of water. Sun tenants own their manufactured homes, boats and residential vehicles and pay Sun for the right to occupy space within its communities. Sun also provides services to its communities. Morningstar has a “buy” rating and $172 fair value estimate for SUI stock, which closed at $123.22 on Nov. 7.
Healthpeak Properties Inc. (DOC)
Healthpeak Properties is a health care REIT that invests in life science and medical office properties and other health care facilities throughout the U.S. Healthpeak recently completed a merger with Physicians Realty Trust, and the combined company began trading under the ticker DOC in March. Brown projects the population of Americans aged 80 or higher will nearly double in the next decade. This age group spends more than four times the national average on health care, a major demand tailwind for Healthpeak. Morningstar has a “buy” rating and $30.50 fair value estimate for DOC stock, which closed at $22.56 on Nov. 7.
[READ: 5 Ways to Build Passive Income Through Investing]
Equity LifeStyle Properties Inc. (ELS)
Equity LifeStyle Properties is a residential REIT that specializes in property operations, home sales and rental operations of manufactured homes, recreational vehicle communities and marinas. Equity LifeStyle targets retirement destinations, and more than 70% of its properties are either age-restricted or have an average resident age over 55. Brown says growth in the over-60 demographic will support higher rent growth and solid internal growth for Equity LifeStyle in the next several years. However, Brown says tenants start aging out of the manufactured housing market around age 80. Morningstar has a “buy” rating and $76 fair value estimate for ELS stock, which closed at $69.76 on Nov. 7.
Host Hotels & Resorts Inc. (HST)
Host Hotels & Resorts is a hotel and resort REIT that owns luxury hotels in North and South America. Brown says hotel REITs are extremely high-beta investments that outperform other properties when the economy is strong. He says business travel is still below pre-pandemic levels in 2019 but should continue to rebound and normalize by 2027. Brown says Host took advantage of the drop-off in travel during the pandemic by investing in renovations that will lead to permanently higher operating margins in the future. Morningstar has a “buy” rating and $24 fair value estimate for HST stock, which closed at $18 on Nov. 7.
Federal Realty Investment Trust (FRT)
Federal Realty Investment Trust is a retail REIT that owns and manages community and neighborhood shopping centers. Brown says Federal Realty has recently reported renewal spreads that are well ahead of its average levels from 2019 to 2023. Renewal spread is the percentage difference between the net effective rent on a new lease versus a prior lease. Brown says it takes years for inflation to trigger higher rents for retail REITs, so Federal Realty will likely continue to generate strong renewal spreads. Morningstar has a “buy” rating and $142 fair value estimate for FRT stock, which closed at $113.64 on Nov. 7.
Americold Realty Trust Inc. (COLD)
Americold Realty Trust is the world’s largest owner and operator of temperature-controlled cold storage warehouses. These facilities primarily hold perishable food products, but they also hold additional temperature-sensitive items, such as florals, pharmaceuticals and chemicals. The stock is down about 23% this year, the worst performance of any REIT on this list. Fortunately, the falling share price has bumped Americold’s dividend yield up to 3.4%. Brown says a rebound in food manufacturer production has helped Americold’s fundamentals, and he anticipates the company’s market share will expand. Morningstar has a “buy” rating and $31.50 fair value estimate for COLD stock, which closed at $23.17 on Nov. 7.
Kilroy Realty Corp. (KRC)
Kilroy Realty is an office REIT that owns and develops life sciences and other office properties in Los Angeles, Seattle, San Diego, San Francisco and Austin. Analyst Suryansh Sharma says Kilroy’s improving funds from operation is a positive sign West Coast office fundamentals have stabilized. Sharma says demand for office space in Los Angeles and San Francisco was hit hard during the COVID-19 pandemic, and tech sector office jobs have been slow to recover. Fortunately, he says Kilroy’s high-quality office portfolio has held up relatively well. Morningstar has a “buy” rating and $59 fair value estimate for KRC stock, which closed at $41 on Nov. 7.
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10 of the Best REITs to Buy for 2025 originally appeared on usnews.com
Update 11/08/24: This story was previously published at an earlier date and has been updated with new information.
