The real estate investment trusts (REITs) strong operating performance in 2022 was a welcome sight for real estate investors. The best REITs emerged as the post-pandemic reopening catalyzed positive market conditions.
However, questions remain on whether these tailwinds will continue supporting REIT growth in 2023. While considering macro-level uncertainties, there’s reason to be relatively optimistic about finding the best REITs this year.
Investing in the best REITs is an attractive option for investors looking to diversify their portfolios, achieve returns over the long run and take advantage of economic tailwinds.
Despite the economic slowdown, REITs offer an ideal way to benefit from attractions such as secular growth prospects and attractive relative earnings growth. Thus, if the U.S. economy takes a downturn, these asset types could be some of the best-positioned ones to benefit in the long run.
Having said that, let’s look at three of the best REITs t0 wager on at this time.
|Digital Realty Trust
Simon Property (SPG)
Simon Property (NYSE:SPG) is one of the best REITs, managing some of the most valuable properties in the United States. It specializes in regional malls, outlet centers, and lifestyle/community centers – all offering something digital shopping fails to provide; an experience.
This ability to create attractive modern-day shopping adventures makes investing in Simon Property a smart pick.
Despite recent news, there’s still hope for Simon Property Group as macroeconomic trends slowly start to turn. With the pandemic a thing of the past and inflation being closely monitored, more money has started to flow back into markets led by SPG.
Consequently, the company’s net income margin have grown by over 38% on a year-over-year basis. Additionally, its average funds from operation payout ratio is also over the 60% mark for the year. Perhaps more importantly, it offers a healthy dividend of 5.5%, with healthy growth in payouts.
From medical office buildings to senior housing and hospitals, Ventas (NYSE:VTR) is a top player specializing in healthcare and senior living facilities. Their reliable services have set healthcare standards across North America and beyond.
With more than 1,200 facilities across North America and the U.K., it remains one of the largest healthcare REITs. It offers an incredible way to play the aging population trend in the U.S.
Vantas’ senior housing portfolio has seen remarkable growth in recent quarters, pointing to a brighter outlook. With the aging baby boomer generation driving heightened demand for senior housing services, Ventas is perfectly positioned to take advantage of this long-term trend and grow its stock at a healthy pace in the future.
Also, it yields a considerable 3.4% and offers tremendous upside ahead.
Digital Realty Trust (DLR)
Digital Realty Trust (NYSE:DLR) continues to pave the way for reliable and secure data centers worldwide. With more than 166 state-of-the-art data centers located in various regions and countries, it offers unparalleled services on a global scale.
As one of the leading names in digital services, Digital Realty shows time and time again why it excels when it comes to providing top-notch data center capabilities that keep customers connected and secure.
With a demonstrated ability to meet customers’ needs in various industries, including cloud and information technology and financial services, the firm has an incredible long-term growth trajectory.
Revenue growth has been impressive over the past few quarters on the back of record quarterly bookings and the firm signing deals that could generate over $150 million in rental revenues in its third quarter. Moreover, it boasts an excellent dividend profile, with a 4.3% yield and 17 years of payout expansion.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.