that slide is S&P 500 It can be a buying opportunity. Bank of America strategists see it that way.
BofA analysts wrote in a commentary that REITs “represent their favorite market capitalization sector as they offer higher yields, higher dividends and inflation-matched income.” Income is protected from inflation because rents often rise in sync with inflation.
“Historically, real estate has outperformed late in the cycle, ranking second only to upside energy. [earnings] revision [by analysts] Fundamentals remain solid in 2022,” said the analyst.
They like apartment REITs. “Considering record occupancy rates, healthy rent-to-income ratios, continued housing shortages and rising mortgage rates have made rentals more attractive, multifamily homes have never looked better. No,’ they said.
Here are the top REITs selected by BofA analysts:
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· American Homes 4 Rent (AMH) The company has a “high-quality single-family rental portfolio,” the second largest in the sector, according to BofA analysts. “Based on stabilized future net asset value estimates, AMH’s valuation is attractive and strong. Balance sheetAnalysts noted “limited new supply of single-family homes, structural demographic tailwinds from aging millennials, increasing consolidation/development opportunities, prospects for margin growth, rising amenity fees, and strong management” is mentioned.
· federal real estate investment trust (FRT) According to analysts, it is a nationwide strip mall REIT that owns, operates and develops “high-quality retail properties.” There are properties across the coastal market with strong demographics and a focus on First Ring suburbs. “FRT is trading at a significant discount to historical premiums relative to its peers,” said the analyst. This adds “great value to his REIT, which owns a top-ranked portfolio, along with a strong balance sheet and management team.”
· public storage (PSA) Analysts say it’s the largest self-storage REIT in the United States and is “increasing returns on technology investments.” “PSA has the strongest balance sheet in the sector.” Key strengths include PSA’s non-identical store portfolio, which currently accounts for 25% of assets, and “expects growth as these assets lease up.” , will boost internal growth,” analysts said. PSA’s customers are also staying longer on average, which helps. Earnings.
· Rexford Industrial Realty (REXR) Analysts say they are “local snipers in the tight Southern California infill industry market”. “REXR owns, acquires, redevelops, and operates warehouses exclusively in the Southern California infill market near large population centers,” analysts said. , we expect the strongest rental growth as supply shrinks from conversion to more and better uses, which will enable REXR to deliver the strongest organic growth in the industry .”
· UDRMore (UDRMore) “This is an apartment REIT with a geographically diversified portfolio, a strong operating platform and a respected management team,” analysts said. I We love UDR’s focus on technology…”