These 5 REITs Offer 2022 Upside Potential of More Than 20%

Innovative Industrial Properties

San Diego-based Innovative Industrial Properties Inc. (NYSE: IIPR) is one of the country’s largest owners and managers of specialized properties for state-licensed operators of regulated medical-use cannabis growing facilities. In BTIG’s view, the company offers investors three key benefits. First, the U.S. cannabis market is still in its “infancy.” Second, the company has an “outsized growth profile” compared to other REITs. And third, cannabis demand is secular, not cyclical.

At a recent price of around $209.70, the potential upside based on BTIG’s price target of $290 is 38.1%. Innovative Industrial Properties pays a dividend yield of 2.78%.

Avalon Bay

Avalon Bay Communities Inc. (NYSE: AVB) owns more than 86,000 apartments in 11 states, primarily along the east and west coasts of the United States. It is also expanding into southeast Florida and the Denver metropolitan area. BTIG expects above-average same-store net operating income growth in these markets this year, with demand and rental rates continuing to improve as the U.S. economy recovers from the worst effects of the pandemic.

At a recent price of around $249.30, the upside potential based on BTIG’s price target of $307 is 23.1%. Avalon Bay pays a dividend yield of 2.53%.

Terreno Realty

Terreno Realty Corp. (NYSE: TRNO) owns and operates industrial real estate in six large U.S. coastal markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami and Washington, D.C. The company owns 253 buildings, with 15.1 million square feet of space. At the end of December, Terreno claimed 554 tenants and a lease rate of 95.5%. BTIG noted that Terreno underperformed the industrial sector by 560 basis points last year, but things are improving:

As industrial demand accelerated during the pandemic and tenants continued to push closer to population centers, Terreno’s acquisitions and operating fundamentals have ramped to record levels. Indeed, the company closed on $657.7M of transactions (~125% higher than the prior record set in 2017), and through 3Q21 Terreno’s SSNOI and earnings growth have led the industrial sector.

At a recent price of $76.80, the upside potential to BTIG’s price target of $94 is 22.4%. Terreno pays a dividend yield of 1.77%.

And Others

Here are other BTIG Top Picks among REITs:

  • Alpine Income Property Trust Inc. (NYSE: PINE): Recent price, $19.90; BTIG target $23
  • Pebblebrook Hotel Trust (NYSE: PEB): Recent price $23.50; BTIG target $26
  • Simon Property Group Inc. (NYSE: SPG): Recent price $158.60; BTIG target $177
  • Invitation Homes Inc. (NYSE: INVH): Recent price $43.00; BTIG target $50
  • Retail Opportunity Investments Corp. (NASDAQ: ROIC): Recent price $19.30; BTIG target $20

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