Best REIT Stocks to Invest in: A Broker’s Guide

What are REITs?

REITs are securities that allow investors to own shares in companies that own, operate, or finance income-generating real estate across various sectors. Their unique structure requires them to distribute at least 90% of taxable income as dividends, creating distinct trading characteristics compared to traditional equities.

Types of REITs Available for Trading

• Equity REITs: Own and manage physical properties, generating revenue primarily from tenant rents—these represent the majority of tradable REITs with good liquidity.
• Mortgage REITs: Provide real estate financing by purchasing or originating mortgages and mortgage-backed securities. These often display higher volatility and sensitivity to interest rate movements.
• Hybrid REITs: Combine strategies of both equity and mortgage REITs—typically less common but can offer interesting trading opportunities during market transitions.

Beyond these classifications, REITs specialize in different sectors, each with distinct trading characteristics, volatility profiles, and catalyst responses.

Why REITs Deserve a Place in Your Offering

For brokerages looking to expand their product range, REITs offer several compelling advantages:

• Income Component: Higher-than-average dividend yields create income trading opportunities
• Liquidity: Most established REITs trade with sufficient volume for retail clients
• Diversification: Lower correlation with broader equities provides portfolio hedging options
• Inflation Trading: Potential inflation hedge characteristics suitable for macroeconomic trading strategies
• Sector Rotation: Diverse subsectors allow tactical rotation strategies as economic cycles progress
• Technical Patterns: Many REITs display predictable technical patterns suitable for chart-based strategies

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According to Nareit’s research, REITs have delivered competitive total returns compared to the S&P 500 over multiple timeframes, though with distinct cyclical behavior that creates both trend-following and contrarian trading opportunities.

Current REIT Market Dynamics

The REIT market in 2025 presents a complex trading landscape shaped by evolving post-pandemic realities, interest rate shifts, and sector-specific disruptions. Following the rate pivot that began in late 2024, REITs have entered a new trading regime that requires an updated approach from market participants.

Performance Trends Creating Trading Setups

REIT performance has become increasingly sector-driven rather than moving as a unified asset class—creating tactical rotation opportunities for sophisticated traders:

• Industrial and logistics REITs show momentum continuation patterns supported by e-commerce structural growth
• Data center REITs exhibit higher volatility, with AI infrastructure demand creating sharp breakout moves
• Healthcare REITs display more defensive characteristics with lower beta and steadier price channels
• Office REITs show bifurcation between prime and secondary properties, creating pairs trading opportunities
• Retail REITs have stabilized into range-bound patterns with catalyst-driven breakouts around tenant announcements

The Interest Rate Trading Factor

For traders, understanding the relationship between REITs and interest rates is essential for anticipating price movements. When rates decline:

• Price action typically shows momentum across the sector, with high-yield REITs leading
• Relative strength shifts from defensive to growth-oriented REITs
• Technical support levels strengthen as dividend yields become more attractive than bonds
• Breakouts tend to sustain longer without rate headwinds

With rates trending downward in 2025, many REITs have exhibited bullish chart patterns, though with sector-specific timing and magnitude differences that create spread trading opportunities.

Top Residential REITs

Residential REITs own and manage multi-family apartments, single-family rentals, and manufactured housing communities. Their trading characteristics are tied to housing affordability metrics, rental rate trends, and geographic population shifts.

Apartment REIT Trading Opportunities

AvalonBay Communities (AVB) presents compelling trading characteristics with its coastal market focus and strong technical chart patterns. Traders should note:

• Consistent support at 200-day moving averages during sector pullbacks
• Seasonal strength patterns aligning with leasing seasons
• Higher average daily volume than sector peers, enabling tighter bid-ask spreads
• Technical responsiveness to housing market data releases

Equity Residential (EQR) offers alternative trading dynamics focusing on urban and high-density suburban markets. Trading considerations include:

• Higher sensitivity to urban employment data points
• Clear technical reactions to rental rate surveys and reports
• Frequent gap-and-fill patterns following quarterly earnings
• Strong option chain liquidity for derivatives strategies

Both stocks provide liquid trading vehicles for expressing views on the higher end of the rental housing market.

Single-Family Rental Trading Approaches

The institutionalization of single-family rentals has created new trading instruments, with Invitation Homes (INVH) emerging as the sector’s most liquid trading vehicle. INVH offers:

• Exposure to Sunbelt migration trends with strong technical correlation to regional economic data
• More consistent trading volumes than apartment REIT competitors
• Responsive price action to housing starts and existing home sales reports
• Growing options volume allows more sophisticated trading strategies

The business model has displayed lower fundamental volatility than expected, but price action still provides sufficient movement for active traders.

Manufactured Housing

Equity LifeStyle Properties (ELS) specializes in manufactured housing communities and RV resorts, offering unique trading characteristics. ELS features:

• Lower beta and volatility than broader REIT indices—suitable for risk-off positioning
• Strong support levels during market corrections due to a recession-resistant business model
• Clear technical ranges make it suitable for range-bound trading strategies
• Seasonal patterns related to retirement migration and RV travel seasons

The manufactured housing sector typically exhibits more predictable price action than other residential segments, making it attractive for technical traders seeking defined risk parameters.

Top Commercial REITs

Commercial REITs display distinct trading patterns based on changing workplace utilization, retail evolution, and logistics transformation. Trading these sectors requires awareness of both cyclical and secular trends.

Office REIT Trading Tactics

Office REITs continue adapting to hybrid work models, creating trading opportunities around adaptation success. Boston Properties (BXP), the largest publicly traded office REIT, presents these trading characteristics:

• Higher beta and volatility than the broader REIT market
• Strong technical reactions to metropolitan office occupancy reports
• Notable gap-fill patterns following quarterly earnings and leasing announcements
• Options chain liquidity suitable for implementing defined risk strategies

While fundamentals remain challenging, price volatility creates trading opportunities in both directions.

Alexandria Real Estate Equities (ARE) offers exposure to life sciences real estate with distinct trading patterns:

• Lower correlation to traditional office metrics
• Higher sensitivity to pharmaceutical and biotech sector funding news
• Technical support at key dividend yield thresholds
• More defensive characteristics during broader market corrections

Life science offices have shown distinct technical behavior compared to conventional office space, creating basic trading opportunities.

Retail REIT Market Dynamics

Retail REITs have established new trading patterns following e-commerce disruption and pandemic impacts. Realty Income (O), marketed as “The Monthly Dividend Company,” displays these trading characteristics:

• Pronounced interest rate sensitivity with clear technical correlations to Treasury yields
• Strong support levels at key dividend yield thresholds (typically 5-6%)
• Lower intraday volatility but significant swing trading opportunities around FOMC decisions
• Liquid options market with heavy covered call writing activity

Simon Property Group (SPG), focused on premium malls and outlet centers, offers more cyclical trading patterns:

• Higher beta and volatility than triple-net retail peers
• Strong technical reactions to consumer spending and retail sales reports
• Clear seasonal patterns around holiday shopping seasons
• Gap-fill tendencies following occupancy and rent growth announcements

These contrasting retail REITs provide trading vehicles for expressing different views on consumer behavior and shopping trends.

Industrial and Logistics REITs

Industrial REITs continue benefiting from e-commerce and supply chain reconfiguration, with distinct technical patterns. Prologis (PLD), the global leader in logistics real estate, features:

• High correlation to e-commerce growth metrics and transportation data
• Technical strength during supply chain disruption periods
• Clear reaction patterns to new facility announcements from major e-commerce players
• Sufficient volatility for momentum strategies despite the strong fundamental backdrop

Rexford Industrial Realty (REXR) offers more focused exposure to the supply-constrained Southern California market:

• Higher beta and volatility than diversified industrial peers
• Strong technical reactions to port volume and shipping container data
• More pronounced moves following regional economic announcements
• Clear technical support levels at key expansion milestones

Industrial REITs generally display stronger trend persistence than other REIT subsectors, making them suitable for trend-following strategies.

Top Specialized REITs

Some of the most compelling trading opportunities can be found in specialized REITs addressing unique market needs with distinct technical characteristics.

Healthcare REIT Trading Approaches

Healthcare REITs own medical offices, hospitals, senior housing, and skilled nursing facilities, displaying defensive trading characteristics.  Welltower (WELL) offers:

• Moderate volatility with defined support levels around key dividend yields
• Counter-cyclical strength during broader market corrections
• Technical reactions to healthcare policy announcements and Medicare/Medicaid updates
• Seasonal patterns around flu seasons and healthcare utilization cycles

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Healthcare Realty Trust (HR) provides more targeted exposure to medical office buildings with:

• Lower overall volatility suitable for low-risk positioning
• Technical correlation to healthcare employment statistics
• Strong support derived from a stable tenant base of health systems and physician groups
• More predictable earnings patterns create trading opportunities around quarterly reports

Healthcare REITs typically exhibit a lower correlation to broader market movements, making them valuable trading vehicles during periods of market stress.

Data Center REIT Technical Analysis

Data center REITs own facilities housing servers and networking equipment, with trading patterns increasingly influenced by AI infrastructure demand. Digital Realty Trust (DLR) features:

• Higher volatility than traditional REITs due to technology sector overlap
• Strong technical reactions to cloud provider capital expenditure announcements
• Clear support/resistance levels following major hyper-scale leasing deals
• Increasing correlation to semiconductor and AI-focused technology stocks

Equinix (EQIX), with its interconnection focus, displays distinct trading patterns:

• Premium valuation metrics create technical behavior more similar to technology growth stocks
• Lower dividend yield support than traditional REITs
• Technical strength during digital transformation acceleration periods
• Trading correlation to internet traffic growth and enterprise cloud adoption metrics

Data center REITs provide traders with hybrid exposure to both real estate stability and technology sector growth dynamics.

Self-Storage REIT Market Behavior

Self-storage REITs own and operate facilities where individuals and businesses rent space, displaying unique cyclical patterns. Extra Space Storage (EXR) exhibits:

• Moderate volatility with clear technical ranges
• Seasonal strength aligned with moving seasons (spring/summer)
• Trading correlation to residential real estate turnover metrics
• Technical support derived from a consistent dividend growth history

Self-storage REITs typically display lower volatility than many REIT subsectors, but a sufficient movement for swing trading approaches around seasonal patterns and housing market shifts.

Emerging REIT Trading Opportunities

Beyond established sectors, several emerging opportunities in the REIT space present new trading vehicles for forward-looking market participants.

Niche Sectors with Distinct Trading Patterns

• Cell Tower REITs like American Tower (AMT) and Crown Castle (CCI) display trading characteristics influenced by wireless carrier capital expenditure cycles, spectrum auctions, and technology upgrade paths.
• Timber REITs like Weyerhaeuser (WY) offer hybrid exposure to both real estate and commodities markets, with price action influenced by housing starts, lumber prices, and growing carbon credit markets.
• Cannabis REITs such as Innovative Industrial Properties (IIPR) present higher volatility trading vehicles tied to regulatory developments and cannabis industry capital constraints, with clear technical reactions to state-level policy announcements.

International REIT Trading Considerations

For brokers offering international markets, these REIT markets present distinct trading opportunities:

• Singapore REITs feature higher dividend yields and lower volatility than many U.S. counterparts.
• Australian REITs provide exposure to a different interest rate cycle with distinct technical patterns.
• European logistics REITs display a correlation to regional e-commerce adoption metrics with different seasonal patterns than their U.S. equivalents.

Currency fluctuations create additional trading dimensions when positioning in international REITs.

Innovative Business Models and Trading Implications

Several emerging REIT business models create new trading dynamics:

• Cold storage REITs with price action influenced by food supply chain metrics and pharmaceutical storage demand
• Life science real estate displaying trading correlation to biotechnology funding cycles and research breakthrough announcements
• Single-family rental to homeownership models creating hybrid exposure to both rental and homebuying markets

These innovative approaches typically display higher beta and volatility than established REIT sectors, creating opportunities for momentum and breakout strategies.

The Bottom Line

REITs represent a valuable addition to any comprehensive brokerage platform, offering clients exposure to real estate markets with the liquidity of exchange-traded securities. While REITs were historically viewed primarily as income investments, today’s market offers numerous trading opportunities across timeframes and strategies.