Investing

Jefferies Has 10 Big Reasons to Buy Real Estate and 5 Top Picks

Nexpoint holds over $1.2 billion in real estate assets, largely in value-add multifamily properties. This multifamily expertise continues to give rise to new opportunities, driving the firm’s Delaware Statutory Trust offerings, among other investment strategies. Its real estate assets also include single-family rentals, office and retail, self-storage and hospitality.

Shareholders receive a 2.39% dividend. Jefferies has a price target for the stock, while the consensus target is $45.79. The shares closed most recently at $46.09.

Rexford Industrial Realty

This company could really take off if the current economic expansion is sustained. Rexford Industrial Realty (NYSE: REXR) acquires, redevelops, owns, manages and operates industrial warehouse properties in Southern California infill markets. The company plans to grow its portfolio and earnings through market rent and occupancy growth, and a large pipeline of acquisitions in the same region.

Rexford posted solid second-quarter core funds from operations that were above the consensus forecast. Portfolio metrics remain very solid, especially leasing spreads. Management bumped guidance midpoint to in-line with Wall Street. In addition, the revised guidance assumes no acquisitions, which suggests further upside later in the year.

Investors receive a 1.76% dividend. The $50 Jefferies price objective compares with a $45 consensus figure and the most recent close at $42.12 a share.

STAG Industrial

This is another strong industrial play that offers solid upside potential. STAG Industrial Inc. (NYSE: STAG) is a self-managed full-service real estate company focused on the acquisition, ownership and management of single-tenant, Class B warehouses in secondary markets across the United States. The company continues to focus on expansion of its acquisition platform to find acquisitions to grow the portfolio.

The company posted funds from operations that were in line with the consensus estimate. Revenues rose around 13.1% year over year but fell short of expectations. When the company reported earnings, it also moved 2019 acquisition guidance by $50 million to $750 million to $900 million.

Shareholders receive a very attractive 4.82% dividend. Jefferies has set its price target at $34. The consensus target is $32.45, and the stock closed on Thursday at $29.69.

UDR

This off the radar company could be ready for a major breakout. UDR Inc. (NYSE: UDR) is a multifamily REIT that owns, operates, acquires, develops and redevelops apartment communities across the United States. The company’s top markets (including shares of joint ventures) are New York, metro D.C. and Orange County and San Francisco in California.

As of the second quarter of 2019, UDR owned or had an ownership position in 50,829 apartment homes, including 366 homes under development. The west coast and the sunbelt areas continue to spur growth, with metrics in San Francisco, Seattle and New York improving sequentially.

Investors receive a 2.96% dividend. The Jefferies price target is $54. The consensus target of $47.16 is still above the most recent closing price of $46.73 a share.

These smaller capitalization companies are all focused on domestic business and don’t have the kind of overseas exposure that some of the biggest REITs have, plus they offer investors solid dependable distributions, which make sense in a low yield environment.