In 2020, the real estate sector suffered a significant loss as a result of pandemic-related limitations. According to a McKinsey & Company research, commercial real estate transactions in the United States fell 57% in the third quarter of 2020 compared to the same time in 2019.
On the other hand, real estate equities have long been a popular option among investors due to their endurance and resilience. The S&P 500 Real Estate Index has returned 9.31% in the last ten years, virtually identical to the overall market. Real estate equities are attractive to investors because of their long-term prospects. Investors can earn from rental income and other associated ways if they choose wise assets. In particular, REITs (Real Estate Investment Trusts) are seen as a haven against inflation and may help investors diversify their equity holdings.
With falling interest rates and a robust vaccination procedure, the real estate or REITs industry is crawling back to pre-pandemic levels. In 2021, the Financial Times Stock Exchange All Equity REITs index returned at 23.6%. In Q2 2021, commercial real estate in the United States exceeded pre-pandemic levels, with investors purchasing commercial buildings worth $144.7 billion, more than doubling the amount purchased in the same time the previous year. Similarly, retail REITs gained 35.9% in the first half of 2021, and the funds from operations, or FFO, from this sector, increased to 5.6% in Q1 2021.
The real estate sector is red hot on Wall Street at the moment, for showing incredible results for both the month of August and 2021 as a whole. Let’s look at just a few of the real estate stocks that the experts call smart picks for your portfolio…
CBRE Group, Inc. (CBRE)
CBRE Group, Inc. (CBRE) provides commercial real estate and investment services. They also deal in property leasing, capital markets, project management, and valuation services worldwide. The Global Workplace Solutions Segment offers an array of integrated, contract-based outsourcing services to real estate occupiers. The Real Estate Investments Segment includes worldwide investment management services to assist property occupiers and owners in meeting the rising need for flexible office space. Colbert Coldwell started the firm in 1906, and it is located in Dallas, Texas.
CBRE is a dynamic company and has shown its worth through its stock value. Its latest earnings report is particularly impressive, beating analysts’ EPS (Earnings-per-share) projections by 74.62% and revenue expectations by 5.44%. CBRE’s Year-over-year numbers show healthy growth in all areas. CBRE has a consensus price target of 107.00 among analysts that provide 12-month price estimates, with a high of 163.00 and a low of 102.00. The median estimate reflects an increase of 9.28% from its current price. Forecasts for Net Income growth, Revenue growth, EPS growth, and so on all look good, and the consensus is to buy shares of CBRE.
Prologis, Inc. (PLD)
Prologis, Inc. (PLD) is a real estate investment trust (REIT) management company. It is divided into two segments: Real Estate Operations and Strategic Capital. The Real Estate Operations sector includes rental revenues, recoveries, and costs realized from its consolidated assets and the ownership and development of logistical sites. The Management of Co-Investment Ventures and Other Unconsolidated Organizations category represents the management of co-investment ventures and other unconsolidated entities. The firm was established in 1991 and is based in San Francisco, California.
PLD’s current dividend yield is 1.93% as of August 25, 2021. Its financials are as solid as they come right now, with their latest quarterly earnings beating analyst’s expectations for EPS by 82.34% while concurrently almost meeting them on Revenue by 0.94%. They report again on October 9th, but PLD boasts an EPS of 47 cents per share and a billion in sales for the current quarter. The EPS and Revenue forecasts are both excellent on both a monthly and annual basis. PLD has a consensus price target of 143.00 among analysts that provide 12-month price estimates, with a high of 159.00 and a low of 121.00. The median estimate indicates an increase of 3.30% from its current price. The consensus among experts is to buy shares in Prologis Inc (PLD).
Kilroy Realty Corporation (KRC)
Kilroy Realty Corp. (KRC) is a real estate company that specializes in the development, purchase, and management of commercial and mixed-use properties. It owns, develops, buys, and manages real estate assets in the coastal districts of Los Angeles, Orange County, San Diego County, the San Francisco Bay Area, and Greater Seattle, focusing on Class A properties. The firm was established on September 13, 1996, and is based in Los Angeles, California. The firm owns and operates 117 office buildings across the United States.
KRC’s most recent quarterly earnings report impressed Wall Street when it beat analysts’ expectations relatively easily. It beat EPS projections by 31.78% and revenue expectations by 3.96%. KRC reports October 17th again, but it shows $222.7 million in sales for the current quarter, with an Earnings-per-share of 34 cents per share. KRC has a consensus price target of 78.50 among analysts that provide 12-month price forecasts, with a high of 85.00 and a low of 65.00. The median estimate implies an increase of 17.13% over its current price. The forecasts look great for KRC’s EPS and Revenue, and its stock’s buy rating is strong among analysts and experts.
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