The Best REITs to Buy While Real Estate Outperforms the Market

Real estate investment trusts, also known as REITs, typically offer high yields, making them appealing choices for income investors. REITs are interest-rate-sensitive, meaning they tend to outperform the broad market when interest rates fall and underperform when rates rise.

REITs have had a positive year, outperforming the market for much of 2026 so far. In the year to date, the Morningstar US Real Estate Index rose 12.98%, while the Morningstar US Market Index gained 10.37%.

The 12 Best REIT Stocks to Buy Now

These were the most undervalued REIT stocks that Morningstar’s analysts cover as of July 3, 2026.

1. Crown Castle International CCI
2. American Tower AMT
3. SBA Communications SBAC
4. Park Hotels & Resorts PK
5. BXP BXP
6. Kilroy Realty KRC
7. Invitation Homes INVH
8. Sun Communities SUI
9. Healthpeak Properties DOC
10. Equity Lifestyle Properties ELS
11. Realty Income O
12. Equity Residential EQR

To come up with our list of the best REIT stocks to buy now, we screened for:

• REIT stocks that are undervalued, as measured by our price/fair value metric.
• Stocks that earn narrow or wide
  Morningstar Economic Moat Ratings
  , as well as companies that do not have a moat. We think companies with narrow economic moat ratings can fight off competitors for at least 10 years; wide-moat companies should remain competitive for 20 years or more.
• Stocks that earn a Low, Medium, High, or Very High
  Morningstar Uncertainty Rating
  , which captures the range of potential outcomes for a company’s fair value.

Here’s a little more about each of the best REIT stocks to buy, including commentary from the Morningstar analysts who cover each company. All data is as of July 3, 2026.

Crown Castle International

• Morningstar Price/Fair Value: 0.65
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 5.55%
• Industry: REIT - Specialty

Crown Castle International holds the first spot as the least expensive company on our list of the best REITs to buy, trading 35% below our fair value estimate of $117 per share. Crown Castle owns or manages roughly 40,000 wireless towers in the United States. It offers a forward dividend yield of 5.55%.

Crown Castle has pursued a different growth strategy than its two largest competitors by focusing solely on the US infrastructure market. This focus led to a decade of building fiber networks and promoting small cells to wireless carriers to differentiate its core tower business. However, with carrier consolidation and AT&T and Verizon developing extensive fiber networks of their own, this strategy hasn’t panned out. Crown Castle has, wisely, in our view, decided to sell its fiber business, a transaction it expects to close by the end of June 2026.

After the sale closes, the firm will use most of its cash flow to fund the dividend, largely forgoing major growth investments. The size of that cash flow is uncertain because of the firm’s dispute with EchoStar, which accounted for about 5% of revenue in 2025. We expect Crown Castle to ultimately prevail in this dispute, either receiving the revenue to which it is entitled or, more likely, receiving a lump sum.

Crown Castle maintains a portfolio of roughly 40,000 towers, requiring minimal capital investment to drive growing cash flow. Wireless carriers lease space on towers to install antennas and other communication equipment to power their networks. Fixed annual rent escalators of roughly 3% provide a baseline for growth. Additionally, carriers regularly add new equipment to tower sites, increasing rents. Finally, Crown Castle can often locate more than one carrier on a tower, providing operating leverage. If a tower requires incremental infrastructure to support new equipment, carriers often agree to prepay some rent to fund this investment.

We expect towers to continue to provide the foundation on which mobile communications networks depend for broad coverage, and serve as the easiest means of deploying new spectrum bands that become available in the years ahead. That said, we believe the three major US carriers are already well-represented on Crown’s towers, and that incremental demand will be modest, allowing for steady but slow growth after the EchoStar dispute plays out. We expect Crown to deliver increasing returns to shareholders, with a well-funded dividend and the flexibility to repurchase shares.

Read more about Crown Castle International here.

American Tower

• Morningstar Price/Fair Value: 0.74
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 4.20%
• Industry: REIT - Specialty

American Tower owns and operates about 150,000 wireless towers throughout the US, Asia, Latin America, Europe, and Africa. This REIT stock operates in the specialty industry. The stock has a forward dividend yield of 4.2% and trades 26% below our fair value estimate of $225 per share.

American Tower is a geographically diversified wireless tower company, complemented by a small US data center business. We expect the tower business will see steady demand over time, but we don’t believe growth will exceed the mid-single-digit range absent acquisitions. We like that the firm has pulled back on acquisitions over the past three years, as opportunities to invest at good returns have been limited. If the market opens up, American Tower has the balance sheet strength to buy assets, but we expect it to remain focused on internal growth and share repurchases for the time being.

We expect wireless towers to remain a critical element powering wireless networks for the foreseeable future. Contractual annual escalators provide a baseline of growth, while collocations (putting additional tenants on a tower) and lease amendments (existing tenants adding equipment) generate additional revenue. Towers produce significant operating leverage as new tenants are added to an existing site, which should drive margins higher over time.

In 2025, the US tower business accounted for about half of revenue. American Tower owns the strongest portfolio in the country based on revenue per site. With minimal maintenance needs, these assets generate a cash flow margin of around 75%. Continued carrier 5G buildouts and increasing network density should drive growth over the next several years, but we expect revenue growth to slow relative to the past decade. The carriers have now deployed much of the spectrum they bought in the early 2020s, and we don’t believe new auctions will fuel a step-up in demand over the near term.

We like management’s push into international markets, where growth opportunities are stronger. Many international markets, especially in Africa, are still progressing through 4G. Continued investment in new technologies, amid soaring data consumption, should drive international growth. International markets add risks, though, especially during periods of carrier consolidation. American Tower has pulled back on investment in emerging markets to reduce this exposure, but we expect these countries to provide growth over the long term.

Read more about American Tower here.

SBA Communications

• Morningstar Price/Fair Value: 0.74
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 2.71%
• Industry: REIT - Specialty

SBA Communications owns a portfolio of about 46,000 wireless towers throughout North America, South America, and Africa. SBA Communications is 26% undervalued relative to our $250 fair value estimate. This cheap REIT stock operates in the specialty industry and offers a 2.71% forward dividend yield.

SBA Communications has been more cautious than its tower peers in pursuing acquisitions and investing in its business, helping it avoid overpaying for assets and generating somewhat stronger returns on capital. However, it has repurchased shares far more aggressively than others, often at inflated prices. We expect heavy repurchases will continue but also believe the stock is now trading at a reasonable valuation, even with shares moving higher on takeout speculation. In addition, we think SBA’s deal to acquire towers from Millicom and build new sites for the carrier in Latin America will generate solid growth. Still, we wouldn’t bank on a buyout and would favor peers trading at cheaper valuations.

Wireless infrastructure plays a critical role in wireless networks, and this position is unlikely to change for the foreseeable future. Annual rent escalators provide a baseline for revenue growth. Growing data usage pushes the wireless carriers to expand the use of existing towers, further increasing rents, and deploy new sites. When a new site is built on an existing structure, the incremental return on investment for the tower owner is usually very high, as operating costs are mostly fixed.

About 40% of SBA’s towers are in the US, accounting for about 70% of site leasing revenue. The US market is highly profitable and low-risk relative to other countries, but it is also mature. The three major US wireless carriers account for nearly 90% of US leasing revenue. While US network expansion is cyclical, this market should deliver consistent mid-single-digit growth.

SBA has invested heavily internationally, but has reshaped its portfolio recently. It has exited Canada and the Philippines, where it lacked critical mass, and has expanded in Latin America. Brazil is SBA’s largest market outside the US, accounting for more than 10% of revenue. That market has been challenged for several years due to carrier consolidation, and we don’t expect improvement in the near term as the remaining carriers rationalize their networks. But the Millicom deal brings exposure to very stable telecom markets, notably Guatemala, where Millicom and America Movil are the only major carriers.

Read more about SBA Communications here.

Park Hotels & Resorts

• Morningstar Price/Fair Value: 0.74
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 6.93%
• Industry: REIT - Hotel & Motel

Next on our list of the best REITs to invest in now, Park Hotels & Resorts invests in the hotel & motel industry. Park Hotels & Resorts owns upper-upscale and luxury hotels, with 20,467 rooms across 31 hotels in the United States. This cheap REIT stock trades 26% below our fair value estimate of $19.50 per share.

Park Hotels & Resorts is the second-largest US lodging REIT, focusing on the upper-upscale hotel segment. The company was spun out of Hilton Worldwide Holdings at the start of 2017. Since then, it has sold all its international hotels and 27 lower-quality US hotels to focus on high-quality assets in domestic and gateway markets. Park completed the acquisition of Chesapeake Lodging Trust in September 2019; this complementary portfolio of 18 high-quality upper-upscale hotels has diversified Park’s hotel brands to include Marriott, Hyatt, and IHG brands.

The coronavirus pandemic significantly affected the operating results of Park’s hotels, with high-double-digit declines in revenue per available room and negative hotel EBITDA in 2020. The rapid rollout of vaccinations across the country allowed leisure travel to recover quickly, leading to significant growth in 2021 and 2022. However, average daily rate growth has been decelerating year over year since then, and comparable occupancy plateaued in 2024 at a level approximately 7% below 2019 levels. Reduced international tourism and major renovations across the portfolio led to a decline in comparable hotel EBITDA in 2025. However, we think the company should see modest growth in 2026 that improves in the second half of the year as the Royal Palm hotel reopens. Beyond this year, we believe that renovations completed over the past few years should drive revPAR growth above the industry average for several years, allowing operating margins to eventually return to the levels achieved in 2019.

The hotel industry faces several long-term headwinds. Supply has been elevated in many of the largest markets, and that is likely to continue for a few more years. Online travel agencies and online hotel reviews facilitate immediate price discovery for consumers, preventing Park from pushing rate increases. Also, while the shadow supply created by Airbnb doesn’t directly compete with Park on most nights, it does limit Park’s ability to push rates on nights where it would typically generate its highest profits.

Read more about Park Hotels & Resorts here.

BXP

• Morningstar Price/Fair Value: 0.76
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 4.04%
• Industry: REIT - Office

BXP owns 179 properties consisting of approximately 52.6 million rentable square feet of space. BXP is 24% undervalued relative to our $91 fair value estimate. This cheap REIT stock operates in the office industry and offers a 4.04% forward dividend yield.

BXP develops, owns, and manages Class A office properties that are mainly concentrated in six markets: Boston, Los Angeles, New York, San Francisco, Seattle, and Washington, D.C. It owns 164 properties consisting of approximately 50.4 million rentable square feet of space. The firm has positioned itself to benefit from the burgeoning life sciences sector, as it owns approximately 5.6 million square feet of life sciences space and has significant potential for future development here.

The company’s strategy is to develop and own premier properties that maintain high occupancy rates and achieve premium rental rates through economic cycles in supply-constrained markets that have the strongest economic growth and investment characteristics for office real estate. Management has also outlined its policies on capital recycling to ensure continuous portfolio refreshment and value creation while maintaining a strong balance sheet and having adequate access to capital to take advantage of opportunistic situations. We welcome management’s focus on ESG as it aligns its office portfolio to meet clients’ sustainability requirements.

The economic uncertainty resulting from the pandemic recovery and the remote work dynamic created a challenging environment for owners of office real estate. Employees are still hesitant to return to the office; office utilization remains at approximately 50%-55% of the prepandemic level. The net absorption rate remained negative in 2025, and rental growth figures remain disappointing, especially after adjusting for inflation. Having said this, we are seeing an increasing number of companies requiring their employees to return to the office. In the long run, we believe that remote work and hybrid remote work will gain increasing acceptance, but offices will continue to be the centerpiece of workplace strategy and will play an essential role in facilitating collaboration, harnessing innovation, and maintaining the company culture.

Read more about BXP here.

Kilroy Realty

• Morningstar Price/Fair Value: 0.77
• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 5.49%
• Industry: REIT - Office

Kilroy Realty is a premier owner and landlord of approximately 16.3 million square feet of office space across Los Angeles, San Diego, the San Francisco Bay Area, Austin, Texas, and greater Seattle. This REIT stock operates in the office industry. The stock has a forward dividend yield of 5.49% and trades 23% below our fair value estimate of $51 per share.

Kilroy Realty owns, develops, acquires, and manages premier office, life science, and mixed-use real estate properties in Los Angeles, San Diego, San Francisco, Seattle, and Austin. The firm has positioned itself to benefit from the burgeoning life sciences sector with material exposure in its current portfolio and future development pipeline. We also welcome management’s focus on ESG as it aligns its office portfolio to meet the sustainability requirements of its clients.

Kilroy had been able to time the boom in technological employment occurring in the largest metropolitan areas along the West Coast, but the West Coast office markets have been exceptionally weak in the past five years. The company’s strategy is to achieve durable long-term growth by developing and owning the highest-quality real estate in technology and life science market clusters. The quality of its portfolio is evident from the fact that its average age is about 12 years compared with 30 years for peers.

Economic uncertainty as a result of the pandemic recovery and remote work created a challenging environment for office owners. Employees are still hesitant about returning to the office as office utilization remains around 50%-55% of the prepandemic level. The company reported vacancy rates of 24.9% and 13.8% in Los Angeles and San Francisco office markets, respectively, in fourth-quarter 2025. The current vacancy rate in both of these cities is substantially higher than the vacancy rates during the height of the global financial crisis. The net absorption rate in West Coast markets remains negative, and rental growth figures are disappointing, especially after adjusting for inflation. While the West Coast office environment remains challenging, AI-driven growth in the region belies hope for office owners.

Having said this, we are seeing an increasing number of companies requiring their employees to return to the office. In the long run, we believe that hybrid remote work solutions will gain increasing acceptance, but offices will continue to be the centerpiece of workplace strategy and will play an essential role in facilitating collaboration, harnessing innovation, and maintaining culture.

Read more about Kilroy Realty here.

Invitation Homes

• Morningstar Price/Fair Value: 0.80
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 3.93%
• Industry: REIT - Residential

Invitation Homes owns a portfolio of over 86,000 single-family rental homes. This REIT stock operates in the residential industry. The stock has a forward dividend yield of 3.93% and trades 20% below our fair value estimate of $38 per share.

Invitation Homes is the largest single-family rental real estate investment trust with a portfolio of over 86,000 homes. The portfolio is geographically diversified across 17 US markets, with approximately 38% of its homes in the Western United States, 32% in Florida, and 19% in other Southeastern markets. The cost of renting is lower than homeownership in most of the portfolio’s markets, which supports high occupancy and should allow the company to pass along significant rent increases without much pushback. The company’s size gives it some economies of scale in terms of controlling costs, as it can hire its own maintenance and repair technicians to service its homes, allowing it to maintain higher operating margins than smaller competitors that need to contract out the same services. The company regularly recycles capital by selling noncore assets and using the proceeds on higher-quality acquisitions with better growth prospects.

Invitation Homes focuses on owning newer homes in the starter and move-up segments, which are typically around $350,000 in price and less than 1,800 square feet. These homes typically attract a younger demographic. This coincides with a generation of millennials who have long delayed many adult milestones but started to move to the suburbs during the pandemic. Given that millennials typically lack the necessary capital for a down payment, many have chosen to rent single-family homes when they move to the suburbs.

However, the postpandemic bump in demand appears to have finally ended as occupancy has fallen to the historical average for the sector and rent increases are becoming harder to push through onto tenants. We also worry that the sector faces future headwinds when the baby boomers eventually return their housing stock to the market. The increased supply will either lower housing prices to the point that renters can afford to purchase a home or create new rental housing stock that will compete with Invitation Homes’ portfolio. Ultimately, we don’t think the single-family rental market will support growth above inflationary increases.

Read more about Invitation Homes here.

Sun Communities

• Morningstar Price/Fair Value: 0.84
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 3.49%
• Industry: REIT - Residential

Sun Communities is a residential REIT that focuses on owning manufactured housing and residential vehicle communities. This REIT stock operates in the residential industry. The stock has a forward dividend yield of 3.49% and trades 16% below our fair value estimate of $148 per share.

Sun Communities is a residential REIT that focuses on owning manufactured housing and residential vehicle communities after the company completed the sale of its marina segment for $5.5 billion in the second quarter of 2025. The company has grown significantly over the past decade after spending $11.8 billion since 2010 to build a portfolio of 513 properties from just 136 at the end of 2010. Sun targets owning properties that are desirable as second homes or vacation properties, with nearly 50% of the portfolio located in either Florida or Michigan near major bodies of water.

Sun Communities mainly collects rental income from tenants. The tenants own their own manufactured homes and residential vehicles, but then pay Sun for the right to place their home or park their vehicle in the community. The rental income is consistent throughout the year for the manufactured housing portfolio and RV properties with annual memberships, but there is significant seasonality to the transient RV properties. Sun Communities also collects revenue from the sale of manufactured homes and provides services to the communities, though these activities represent a much smaller portion of the company’s total EBITDA.

The sector has benefited from an aging population that desires to own a second home or has the time to go on regular vacations. The growth in the over-60 population over the past decade has supported rent growth that exceeds both inflation and the average rent growth reported by the multifamily REIT sector. While we anticipate that this age cohort will support continued rent growth above inflation, we believe much of the demand growth will be offset by the baby boomer generation turning 80, when we expect people to age out of the target demographic for manufactured housing. Additionally, the transient business has been declining since the start of 2023, causing same-store revenue growth to decelerate from its 2021 highs. Therefore, while we believe that internal growth will remain solid for the next several years, we don’t think it will match the heights the company achieved over the past decade.

Read more about Sun Communities here.

Healthpeak Properties

• Morningstar Price/Fair Value: 0.84
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 5.57%
• Industry: REIT - Healthcare Facilities

Next on our list of the best REITs to invest in now, Healthpeak Properties invests in the healthcare facilities industry. This cheap REIT stock trades 16% below our fair value estimate of $26 per share.

The top healthcare real estate stands to benefit disproportionately from the Affordable Care Act. With an increased focus on higher-quality care being performed in lower-cost settings, the best owners and operators in the industry, which can provide better outcomes while driving greater efficiencies, should see demand funneled to them from the best healthcare systems. Additionally, the baby boomer generation is starting to enter its senior years, and the 80-plus population, an age range that spends more than 4 times on healthcare per capita than the national average, should almost double in size over the next 10 years. In the long term, the best healthcare companies are well-positioned to capitalize on these industry tailwinds.

Given the significant challenges the coronavirus pandemic presented to the senior housing industry, Healthpeak made the strategic decision in 2020 to dispose of most of the company’s senior housing assets in multiple transactions, yielding approximately $4 billion in total proceeds. As a result, Healthpeak’s life science and medical office portfolios are now prominently featured in the company’s portfolio, as the proceeds from the senior housing sales were reinvested into these two sectors. Healthpeak has high-quality assets in top markets that attract credit-grade tenants in both segments, so we believe it makes sense to strategically focus the company on the segments where it has an advantage. The company also completed a $5 billion merger with Physicians Realty Trust in March 2024, adding 16 million square feet of high-quality medical office buildings that complement the company’s portfolio. Following the merger, Healthpeak derives approximately 50% of the company’s net operating income from medical office, 35% from life science, and 15% from a small portfolio of continuing-care retirement communities and other triple-net assets. Despite the possibility of further changes to the ACA, we think any changes will still result in a coordinated value- and outcome-based system that will provide Healthpeak’s current portfolio with strong tailwinds.

Read more about Healthpeak Properties here.

Equity Lifestyle Properties

• Morningstar Price/Fair Value: 0.85
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 3.28%
• Industry: REIT - Residential

Next on our list of the best REITs to invest in now, Equity Lifestyle Properties invests in the residential industry. Equity Lifestyle Properties is a residential REIT that focuses on owning manufactured housing, residential vehicle communities, and marinas. This cheap REIT stock trades 15% below our fair value estimate of $78 per share.

Equity Lifestyle Properties is a residential REIT that focuses on owning manufactured housing, residential vehicle communities, and marinas. The company has a portfolio of 453 properties across the US with a higher concentration in the Sun Belt; 38% of its properties are in Florida, 11% in Arizona, and 10% in California. Equity Lifestyle targets owning properties in attractive retirement destinations. More than 70% of its properties are either age-restricted or have an average resident age over 55.

Equity Lifestyle mainly collects rental income from tenants. The tenants own their own manufactured homes, residential vehicles, and boats but then pay Equity Lifestyle for the right to place their home or park their vehicle in the community. The rental income is consistent through the year for the manufactured housing portfolio and RV properties with annual memberships, but there is significant seasonality to the transient RV properties and the marina portfolio. Equity Lifestyle also collects revenue from the sale of manufactured homes and provides services to the communities, though these activities represent a much smaller portion of total EBITDA.

The sector has benefited from an aging population with a desire to own a second home or the time to go on regular vacations. The growth in the older-than-60 population over the past two decades has supported rent growth that exceeds both inflation and the average rent growth reported by the multifamily REIT sector. While we anticipate that the growth of this demographic will support continued rent growth above inflation, we believe that demand growth won’t be as strong as the baby boomer generation has started to turn 80, which is when we believe that people age out of the target demographic for manufactured housing. Additionally, the transient business has declined since the start of 2023, leading to same-store revenue growth decelerating from 2021 highs. Therefore, while we believe that internal growth will remain solid for several years, we don’t think it will match the heights the company achieved over the past decade.

Read more about Equity Lifestyle Properties here.

Realty Income

• Morningstar Price/Fair Value: 0.85
• Morningstar Uncertainty Rating: Low
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 5.09%
• Industry: REIT - Retail

Realty Income owns roughly 15,500 properties, most of which are freestanding, single-tenant, triple-net-leased retail properties. This REIT stock operates in the retail industry. The stock has a forward dividend yield of 5.09% and trades 15% below our fair value estimate of $75 per share.

Realty Income is the largest triple-net REIT in the United States, with over 15,500 properties that mainly house retail tenants. The company describes itself as “The Monthly Dividend Company,” and its line of business and operating metrics make its dividend one of the most stable sources of income for investors. Even though about 80% of Realty Income’s tenants are in retail, most are focused on defensive segments, with characteristics such as being service-oriented, naturally protected against e-commerce pressures, or resistant to economic downturns. Additionally, the triple-net lease structure places the burden of all operational risk and cost on the tenant and requires the tenant to make capital expenditures to maintain the property rather than the landlord. These leases are often long-term, frequently 15 years with additional extension options, which provides Realty Income a steady stream of rental income. Coverage ratios are also very high, so tenants are healthy and unlikely to request rent concessions, even during downturns. The steady, stable stream of revenue has allowed Realty Income to be one of only two REITs to be members of the S&P High-Yield Dividend Aristocrats Index and have a credit rating of A- or better. This makes Realty Income one of the most dependable investments for income-oriented investors.

Stability comes at the cost of economic profit, however. The lease terms include very low annual rent increases around 1%, which helps keep the coverage ratio high but severely limits internal growth for the company. Therefore, to grow, Realty Income must rely on acquisitions. The company has executed over $28 billion in acquisitions since the start of 2021 at average cap rates near 7%. However, rising interest rates over the past three years have increased the cost to fund external growth. While the company was able to maintain a consistent acquisition cap rate spread above interest rates on debt, we are concerned that the company won’t be able to continuously find deals at high cap rates and Realty Income will be left with just a low internal growth story.

Read more about Realty Income here.

Equity Residential

• Morningstar Price/Fair Value: 0.87
• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 4.02%
• Industry: REIT - Residential

Equity Residential rounds out our list of the best REITs to buy, trading at a 13% discount to our $80 fair value estimate. Equity Residential owns a portfolio of 312 apartment communities with over 85,000 units and is developing two additional properties with 665 units. This affordable REIT stock focuses on residential and offers a 4.02% forward dividend yield.

Equity Residential focuses on owning and operating high-quality multifamily buildings in urban coastal markets with demographics that support high occupancies and strong rent growth. The company has sold out of inland and Southern markets and increased its operations in high-growth core markets: Los Angeles, San Diego, San Francisco, Washington, D.C., New York, Boston, and Seattle. These markets exhibit traits that drive demand for apartments, such as job and income growth, declining homeownership rates, high relative cost of single-family housing, and attractive urban centers that draw younger people. The company regularly recycles capital by selling noncore assets or exiting markets and using the proceeds for its development pipeline or acquisitions, a strategy that has produced strong returns.

While Equity Residential has repositioned its portfolio into markets with strong demand drivers, we are cautious of its long-term growth prospects, given that many markets have historically experienced high supply growth. The urban luxury end of the apartment market, where Equity Residential operates, has seen the most new supply, competing directly with the company’s portfolio. Additionally, the pandemic led many millennials to consider moves to the suburbs, either into suburban apartments or their own single-family homes, though demand for new urban apartments has remained resilient. Equity Residential has created significant shareholder value through development, though rising interest rates have reduced the expected return on new projects.

High inflation has driven revenue significantly higher as apartment leases are generally only a year long, allowing Equity Residential to push rate growth that has matched inflation. However, after peaking in 2022, revenue growth decelerated in 2023 and 2024 and then plateaued in 2025. Still, the company’s funds from operations per share is already above prepandemic levels, and we expect continued same-store growth over the long term to push FFO even higher.

Read more about Equity Residential here.

How to Find More of the Best REIT Stocks to Buy

Investors who’d like to extend their search for top REIT stocks can do the following:

• Review Morningstar’s comprehensive list of real estate stocks to investigate further.
• Stay up to date on the real estate sector’s performance, key earnings reports, and more with Morningstar’s real estate sector page.
• Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
• Use the Morningstar Investor screener to build a shortlist of REIT stocks to research and watch.