REIT stocks typically offer the investors higher returns than other types of stocks for the reason that REITs are required to provide 90% of the taxable income to investors. However, stakeholders should be aware that REITs that offer higher returns are usually risky investments.
We will describe in brief the best-performing REIT stocks that have yields from 1.4% to 6%. The ranking is drawn up on the basis of the companies’ returns in 2020. Each company of the list has a market capitalization of about $2 billion.
Top REITs of 2020
Among the companies with the middle or high capitalization rate are:
- Safehold, with market cap. $2.2 billion and 12.7% return;
- Prologis, $60.7 billion, 7.9%
- Liberty Property Trust, $10.2 billion market cap, 8% return;
- Healthpeak Properties, with market cap. $18.3 billion, 7.3%;
- Digital Realty Trust, $26.8 billion market capitalization, 7.1%.
- Essential Properties Realty Trust, market cap. – $60.7 billion, 7.9% return;
- Gaming and Leisure Properties, $9.9 billion, 7.3%;
Safehold and Essential Properties Realty Trust have already gained the reward of the best-performing REITs earlier, in 2019. These companies are quite new IPO participants, they went public in 2017 (Safehold) and in 2018 (Essential Properties).
Safehold is a company that gains profit from the land lease. Instead of owning the properties, Safehold is the owner of the land where the properties are located. This business model proved its effectivity only in the areas with high prices for the land, that is why the company is focused mainly on the New York area.
Essential Properties Realty Trust
The company’s main operating sphere includes the purchase of single-tenant facilities for retail and their rent to the restaurants, providers of medical services, car washes, convenience stores, and other businesses.
Liberty Property Trust
Liberty Property Trust owns and manages industrial and commercial properties in the U.S and the UK. The company has in its possession 461 industrial and 48 office facilities. This year the investment trust was acquired by Prologis, the next point in our list.
The company’s specialization is logistics real estate, especially in the high-growing markets as South and North America, Asia and Europe. This REIT owns interests in 3,840 properties in 19 countries and serves more than 5,000 tenants.
Gaming and Leisure Properties
The name of the company reflects its main field of activities – gaming and gambling. REIT owns 44 gaming facilities that are located across the U.S and operates two of them.
Healthpeak Properties, Inc. focuses mainly on healthcare-related facilities in the United States. The company owns medical offices, senior housing and science facilities. REIT owns interests in 617 healthcare properties.
Digital Realty Trust
This company focuses on emerging trends as data science, artificial intelligence and cloud-based computing. Real estate investment trust owns interests in 225 data centers in the United States, Canada, Asia, Europe and Australia.