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My Top 5 REITs For 2023: Opportunities in a Challenging Market

CEO Khai Intela
By [Your Name] 2022 proved to be a challenging year for investors, with the S&P 500 experiencing its worst decline since the Great Recession and the bond market seeing record-breaking poor performance. In such a...

By [Your Name]

Business and Finance, Looking Up at High Rise Office Buildings in the Financial District of a Modern Metropolis

2022 proved to be a challenging year for investors, with the S&P 500 experiencing its worst decline since the Great Recession and the bond market seeing record-breaking poor performance. In such a bear market, it's vital to have dry powder available and an updated watchlist of promising opportunities.

In this article, we will explore my top 5 REITs (Real Estate Investment Trusts) for 2023. These REITs offer stability, growth potential, and attractive dividend yields.

REIT #1 - American Tower (AMT)

American Tower

American Tower is the leading cell tower REIT in the market, with a substantial portfolio of over 223,000 communication towers worldwide. With the increasing demand for mobile data usage and the rollout of 5G technology, American Tower's infrastructure is essential for telecom giants like AT&T, Verizon, and T-Mobile. Moreover, the company offers a rare combination of dividend growth and stability, with a 10-year history of increasing dividends. Currently, AMT shares are undervalued compared to historical averages.

REIT #2 - Prologis (PLD)

Prologis

Prologis is a premier logistics REIT with a global reach, owning over 4,900 buildings in North & South America, Europe, and Asia. With Amazon and FedEx as its largest customers, Prologis benefits from the growing trend of e-commerce. Despite the market downturn, the company maintains an A-rated balance sheet and continues to expand its portfolio. Prologis offers a strong dividend track record, with 9 consecutive years of dividend increases. Currently, shares are attractively valued compared to historical averages.

REIT #3 - CubeSmart (CUBE)

CubeSmart

CubeSmart is one of the largest self-storage REITs, catering to the consistent demand for storage space. With a user-friendly digital app, CubeSmart provides convenience and ease of renting for customers. The self-storage sector is expected to continue growing, as people downsize their homes or accumulate belongings. CubeSmart offers an attractive dividend yield of 5.0% and has been increasing its dividend for 12 consecutive years. Shares are discounted compared to their 5-year average.

REIT #4 - VICI Properties (VICI)

VICI Properties

VICI Properties is a top gaming and hospitality REIT and the largest landlord on the Las Vegas Strip. With properties like Caesars Palace and Mandalay Bay, VICI operates in a high-barrier-to-entry space and has strong, quality tenants. The company exhibited resilience during the pandemic, collecting 100% of rents due. VICI has a consistent dividend growth history and is attractively valued compared to its peers.

REIT #5 - AvalonBay Communities (AVB)

AvalonBay Communities

AvalonBay Communities is the second-largest apartment REIT, owning over 80,000 apartment units in prime locations across the United States. With rental revenue growth and potential tailwinds from rising rents and inflation, AVB offers an opportunity for long-term investors. The company pays an attractive dividend yield of 3.9% and is currently undervalued compared to its 5-year average.

In conclusion, although REITs may face challenges during periods of slower economic growth or rising interest rates, quality REITs with proven management and liquidity can outperform. Each of these top 5 REITs offers unique advantages, from dividend growth to stable income and global growth opportunities. Keep an eye on these promising REITs and consider adding them to your investment portfolio.

What are your thoughts on these REITs? Share your opinions in the comments section below. Happy New Year!

Figures and data sourced from original articles: Marketwatch, ycharts, AMT Investor Presentation, PLD Q3 Presentation, VICI Investor Presentation, AVB Q3 Presentation, Fast Graphs, Fast Graphs.

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