10 Best Apartment REITs To Buy Now For Income Investors

Up to date on August twenty first, 2024 by Bob Ciura

As a result of surge of inflation to a 40-year excessive final 12 months, the Federal Reserve raised rates of interest at a speedy tempo over the previous two years to chill the economic system.

However with financial progress slowing, economists now anticipate the Fed to decrease rates of interest as soon as once more, maybe as quickly as September.

Condo REITs have proved resilient to recessions because of the important nature of their enterprise. Additionally they extensively have excessive dividend yields nicely above the S&P 500 Index common.

And, condo REITs would profit from falling rates of interest, which might decrease their price of capital.

You’ll be able to obtain our full REIT listing, together with essential metrics akin to dividend yields and market caps, by clicking on the hyperlink beneath:

Consequently, condo REITs are fascinating candidates for earnings traders.

This text will talk about the prospects of the highest 10 condo REITs in our Certain Evaluation Analysis Database.

The next 10 condo REITs are listed by five-year anticipated annual returns, so as of lowest to highest:

Desk of Contents

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Condo REITs #10: Camden Property Belief (CPT)

Based in 1993 and headquartered in Houston, Texas, Camden Property Belief is among the largest publicly traded multifamily actual property firms within the U.S. The REIT owns, manages and develops multifamily condo communities. It presently owns 172 properties that comprise over 58,000 residences.

On August 1st, 2024 Camden reported its Q2 outcomes for the interval ending June thirtieth, 2024. For the quarter, the corporate reported property income of $387.2 million, a 0.4% enhance in comparison with Q2 2023.

Elevated revenues have been primarily pushed by same-property income progress, which got here in at 2.0%, offset by barely decrease occupancy, which fell from 95.5% to 95.3% between the 2 durations. Nevertheless, resulting from same-property bills rising by 2.7% through the interval, same-property web working earnings (NOI) grew by 1.6%.

Funds from Operations (FFO) totaled $187.7 million, or $1.61 per share, in comparison with $184.0 million, or $1.67 per share, in Q2 2023.

Click on right here to obtain our most up-to-date Certain Evaluation report on Camden Property Belief (CPT) (preview of web page 1 of three proven beneath):

Condo REITs #9: Essex Property Belief (ESS)

Essex Property Belief was based in 1971. The belief invests in West Coast multi-family residential proprieties the place it engages in improvement, redevelopment, administration and acquisition of condo communities and some different choose properties.

Essex has possession pursuits in a number of hundred condo communities consisting of over 60,000 condo properties. The belief has about 1,800 staff and produces roughly $1.6 billion in annual income.

Essex is focused on the West Coast of the U.S., together with cities like Seattle and San Francisco.

Supply: Investor Presentation

On Could 1, 2024, Essex Property Belief reported sturdy first quarter outcomes, reflecting vital progress and strategic developments. The corporate introduced a notable enhance in core Funds from Operations (FFO) per share by 4.9%, which exceeded the preliminary steerage expectations.

This efficiency was bolstered by a progress in blended lease charges of two.2%, with renewal leases rising by 3.9% and new leases by 10 foundation factors. Regionally, Seattle skilled a 3.6% enhance in blended charges, whereas Northern California noticed a 2.1% rise, and Southern California reported a 1.7% enhance.

Click on right here to obtain our most up-to-date Certain Evaluation report on ESS (preview of web page 1 of three proven beneath):

Condo REITs #8: Fairness LifeStyle Properties (ELS)

Fairness LifeStyle Properties, Inc is an actual property funding belief which engages within the possession and operation of lifestyle-oriented properties consisting primarily of manufactured dwelling and leisure automobile communities.

Fairness LifeStyle Properties operates by means of the next segments: Property Operations; and House Gross sales and Leases Operations. The Property Operations phase owns and operates land lease properties. The House Gross sales and Leases Operations phase purchases, sells, and leases properties on the properties.

In the present day, Fairness LifeStyle Properties, Inc. owns or has a controlling curiosity in additional than 400 communities and resorts in 33 states and British Columbia, with greater than 165,000 websites.

On July twenty second, 2024, Fairness LifeStyle Properties reported second-quarter earnings for Fiscal 12 months (FY)2024. The corporate web earnings per widespread share for the quarter elevated to $0.42, a 24.3% rise from $0.34 in 2023. Funds from Operations (FFO) per widespread share and OP unit grew to $0.69, up 13.5%, whereas Normalized FFO reached $0.66, a 2.9% enhance.

For the six-month interval, web earnings per widespread share rose by 29.4% to $1.01, and FFO per widespread share and OP unit elevated by 16.6% to $1.55. Normalized FFO noticed a 5.9% rise to $1.44. .

Click on right here to obtain our most up-to-date Certain Evaluation report on ELS (preview of web page 1 of three proven beneath):

Condo REITs #7: AvalonBay Communities (AVB)

AvalonBay Communities is a $25 billion multifamily REIT that owns a portfolio of a number of hundred condo communities and can be an energetic developer of condo communities. The technique of the REIT includes proudly owning top-tier properties within the main metropolitan areas of New England, New York/New Jersey, Washington D.C., California, and the Pacific Northwest.

AvalonBay Communities reported its earnings for the primary quarter of 2024, showcasing optimistic progress throughout numerous metrics in comparison with the identical interval in 2023. Earnings per share (EPS) rose by 16.2% to $1.22, whereas Funds from Operations attributable to widespread stockholders (FFO) per share elevated by 7.5% to $2.73, and Core FFO per share grew by 5.1% to $2.70.

The corporate’s Similar Retailer whole income elevated by 4.3%, reaching $677.2 million, primarily pushed by a 4.2% enhance in Similar Retailer Residential income, which totaled $669.2 million.

Click on right here to obtain our most up-to-date Certain Evaluation report on AvalonBay Communities (AVB) (preview of web page 1 of three proven beneath):

Condo REITs #6: American Properties 4 Hire (AMH)

Primarily based in Maryland, American Properties 4 Hire is an internally managed REIT that focuses on buying, creating, renovating, working and leasing single-family properties as rental properties. AMH was shaped in 2013 and has a market capitalization of $14 billion.

The REIT holds practically 58,000 single-family properties in additional than 30 sub-markets of metropolitan statistical areas in 21 states.

On August 1st, 2024, AMH introduced second quarter outcomes for the interval ending June thirtieth, 2024. For the quarter, income grew 7.1% to $423.5 million, which was $2.6 million higher than anticipated. FFO of $0.45 in contrast favorably to FFO of $0.41 within the earlier 12 months and was $0.02 forward of estimates.

For the quarter, AMH had a same-home common occupied day share of 96.6%, which was 40 foundation level lower from the prior 12 months. New leases signed had rental fee progress of 5.7% whereas renewal rental charges elevated 5.2%., resulting in a blended progress fee of 5.3%.

Rents and different single-family property revenues improved 7.1% whereas occupied properties of 58,860 in comparison with 58,615 within the first quarter of 2024. Common month-to-month rents per property was up 5.6% whereas property bills elevated 4.8% to $118.8 million.

Click on right here to obtain our most up-to-date Certain Evaluation report on American Properties 4 Hire (AMH) (preview of web page 1 of three proven beneath):

Condo REITs #5: UMH Properties (UMH)

UMH Properties is a REIT that is among the largest manufactured housing landlords within the U.S. It was based in 1968 and presently owns tens of 1000’s of developed websites and 135 communities situated throughout the midwestern and northeastern U.S.

As manufactured properties are cheaper than standard properties, UMH Properties has proved resilient to recessions. This was evident within the extreme recession brought on by the coronavirus disaster in 2020, because the REIT grew its FFO per share by 11% in that 12 months. UMH Properties has grown its FFO per share by 3.8% per 12 months on common during the last decade.

UMH Properties, Inc. (UMH) posted Complete Revenue of $57.7 million for the quarter ending March 31, 2024, marking a ten% enhance from the identical interval in 2023, the place Complete Revenue stood at $52.6 million. Nevertheless, the corporate reported a Web Loss Attributable to Widespread Shareholders of $6.3 million or $0.09 per diluted share for Q1 2024, in comparison with a Web Lack of $5.3 million or $0.09 per diluted share for Q1 2023.

Regardless of the online loss, Funds from Operations Attributable to Widespread Shareholders (FFO) confirmed vital enchancment, reaching $14.0 million or $0.20 per diluted share for Q1 2024, in comparison with $10.6 million or $0.18 per diluted share for Q1 2023, representing an 11% per diluted share enhance.

Click on right here to obtain our most up-to-date Certain Evaluation report on UMH Properties (UMH) (preview of web page 1 of three proven beneath):

Condo REITs #4: Fairness Residential (EQR)

Fairness Residential is among the largest U.S. publicly-traded homeowners and operators of high-quality rental condo properties with a portfolio primarily situated in city and dense suburban communities. The properties of the belief are situated in prosperous areas round Boston, New York, Washington, D.C., Southern California, San Francisco, Seattle, and Denver.

Fairness Residential enormously advantages from the favorable traits of its goal group. Prosperous renters are extremely educated, nicely employed and earn excessive incomes. Consequently, they pay roughly 20% of their incomes on hire and therefore they don’t seem to be burdened by their hire. Due to their sturdy earnings potential, the REIT can simply develop its hire charges 12 months after 12 months.

On April 23, 2024, Fairness Residential (EQR) launched its Q1 2024 outcomes, showcasing a sturdy monetary efficiency that exceeded market expectations. The corporate reported earnings per share (EPS) of $0.93, surpassing the analyst estimates which have been pegged at $0.91.

This efficiency represents a major enhance in comparison with the earlier 12 months’s EPS of $0.56. Income for the quarter stood at $730.82 million, barely above the analyst forecast of $729.83 million, marking a year-over-year progress of three.7%.

Click on right here to obtain our most up-to-date Certain Evaluation report on Fairness Residential (EQR) (preview of web page 1 of three proven beneath):

Condo REITs #3: UDR (UDR)

UDR, also referred to as United Dominion Realty Belief, is a luxurious condo REIT. The belief owns, operates, acquires, renovates, and develops multifamily condo communities in excessive barrier-to-entry markets within the U.S.

A excessive barrier-to-entry market consists of restricted land for brand new building, difficult entitlement processes, low single-family dwelling affordability and powerful employment progress potential. The vast majority of UDR’s actual property property worth is established in Washington D.C., New York Metropolis, Orange County, California, and San Francisco. UDR owns or has an possession curiosity in 58,411 condo properties, 415 of that are properties underneath improvement.

On February sixth, 2024, UDR introduced its 2024 dividend shall be $1.70 per share, which represents a 1.2% enhance and marks the corporate’s thirteenth consecutive annual dividend enhance.

UDR reported second quarter 2024 outcomes on July thirtieth, 2024. The corporate introduced adjusted funds from operations of $0.55 within the second quarter, flat year-over-year.

The quarterly AFFO payout ratio of 77% is comparatively secure for a REIT that should pay out nearly all of its earnings to shareholders. Bodily occupancy of the true property portfolio rose 20 foundation factors in comparison with the prior 12 months interval, to 96.8%.

Click on right here to obtain our most up-to-date Certain Evaluation report on UDR (UDR) (preview of web page 1 of three proven beneath):

Condo REITs #2: Mid-America Condo Communities (MAA)

Mid-America Condo Communities is a REIT that owns, operates and acquires condo communities within the Southeast, Southwest and mid-Atlantic areas of the U.S. It presently has possession curiosity in 101,986 condo models throughout 16 states and the District of Columbia.

MAA is concentrated on the Sunbelt Area of the U.S., which has exhibited superior inhabitants progress and financial progress in the long term. In early Could, MAA reported (5/1/24) monetary outcomes for the primary quarter of fiscal 2024. Similar retailer web working earnings grew 1.4% over the prior 12 months’s quarter, primarily because of progress in common hire per unit in new leases.

Core funds from operations (FFO) per share dipped -3%, from $2.28 to $2.22, resulting from greater curiosity expense, consistent with the analysts’ consensus. MAA has missed the analysts’ FFO estimates solely as soon as within the final 24 quarters.

MAA has ample room to broaden its asset portfolio whereas it’ll additionally develop its backside line by enhancing the worth to its prospects through the rollout of good dwelling expertise in its models.

Click on right here to obtain our most up-to-date Certain Evaluation report on Mid-America Condo Communities (MAA) (preview of web page 1 of three proven beneath):

Condo REITs #1: American Belongings Belief (AAT)

American Belongings Belief is a REIT that was shaped in 2011 as a successor of American Belongings, a privately held firm based in 1967.

AAT has nice expertise in buying, bettering and creating workplace, retail and residential properties all through the U.S., primarily in Southern California, Northern California, Oregon, Washington and Hawaii. Its workplace portfolio and its retail portfolio comprise of roughly 4.0 million and three.1 million sq. ft, respectively. AAT additionally owns greater than 2,000 multifamily models.

In late April, AAT reported (4/30/24) monetary outcomes for the primary quarter of fiscal 2024. Adjusted same-store web working earnings grew 2.3% and funds from operations (FFO) per share grew 8% over final 12 months’s quarter, because of hire hikes and elevated tourism in Hawaii. Due to optimistic enterprise developments, AAT raised its steerage for FFO per share in 2024 from $2.19-$2.33 to $2.24-$2.34.

We word that AAT has overwhelmed the analysts’ estimates for 13 consecutive quarters and lift our forecast from $2.25 to $2.30, consistent with the revised steerage.

Click on right here to obtain our most up-to-date Certain Evaluation report on American Belongings Belief (AAT) (preview of web page 1 of three proven beneath):

Last Ideas

Many condo REITs cross underneath the radar of nearly all of traders resulting from their mundane enterprise mannequin.

Nevertheless, a few of these REITs have supplied exceptionally excessive returns to their shareholders. As well as, condo REITs have proved resilient to recessions, because the demand for housing stays sturdy even throughout tough financial durations.

The above 10 condo REITs are fascinating candidates for the portfolios of income-oriented traders, particularly given the rising danger of an upcoming recession.

If you’re interested by discovering high-quality dividend progress shares and/or different high-yield securities and earnings securities, the next Certain Dividend sources shall be helpful:

Excessive-Yield Particular person Safety Analysis

Different Certain Dividend Assets