The U.S. inflation rate has surged to levels not seen since the early 1980s. This has had profound ramifications for investors. Sectors such as technology have slumped as folks demand profits and cash flow today rather than growth in the future. Meanwhile, out of favor industries such as energy and natural resources have roared back to life.

Real estate investment trusts (or REITs) should find themselves among the winners in this transition. A large part of this is because of how REITs operate. They tend to have a lot of debt on their balance sheets to fund the purchase of their real estate assets. As inflation erodes the value of the dollar, that debt becomes easier and easier to repay. Meanwhile, REIT operators are typically able to raise rents quickly and the value of their underlying land assets tends to increase, creating value for shareholders.

With this in mind, it’s a great time for investors to be looking at undervalued REITs. These seven offer serious upside potential along with solid dividend yields today.

American Tower (AMT)

American Tower (NYSE:AMT) operates more than 220,000 communications sites around the globe, including the cell phone towers that have become ubiquitous since the rise of smartphones. Investors might think American Tower is a mature business, and indeed, towers are already well-served in the United States. However, American Tower has grown dramatically overseas in faster-moving emerging markets.

Cell phone towers are a highly attractive business because of great unit economics. A tower can generally break even if it has just one cellular provider as a tenant. However, income from a second and third telecom carrier provides exceptionally high-margin revenues. American Tower tends to serve as a neutral third-party operator that can sell to all the major telecom carriers in a market, generating those juicy profit margins.

American’s Tower business is going well at the moment; the company is currently at a 17% year-over-year growth rate. Acquisitions, annual rent escalators and organic demand growth have all contributed to the firm’s ongoing gains.

Crown Castle International (CCI)

Crown Castle International (NYSE:CCI) is a big peer to American Tower in the undervalued REITs space. The firm has traditionally specialized in cell phone towers, and generates roughly 70% of its revenues from them.

However, unlike American Tower, CCI has invested heavily in small cells and fiber optic infrastructure as well. As these investments mature, it should give Crown Castle another big driver for growth.

Long story short, between 5G, the internet of things and the increasing demand for streaming video, Crown Castle should have a long runway for delivering more shareholder value.

Crown Castle uses more leverage than many of its peers in the course of building out its business. That could be seen as a negative, but it swings to a positive given the current inflationary environment. Crown Castle should be able to generate sharply higher revenues from its assets while its debts become more manageable thanks to said inflation. CCI stock is down 13% year to date, offering a reasonable entry point today.

Weyerhaeuser (WY)

Weyerhaeuser (NYSE:WY) is one of America’s largest lumber companies and REITs in that niche. It has owned and operated timberlands and related forestry products businesses for more than a century.

The company is enjoying excellent fortunes today given current inflationary conditions. In 2021, revenues soared to $10.2 billion from $7.5 billion in 2020. EBITDA nearly doubled for the same period as well. Earnings soared to $3.47 per share for fiscal year 2021, leaving the stock around 10x earnings.

Perhaps earnings won’t quite repeat in the future as the housing market dips. Analysts expect Weyerhaeuser to earn $3.06 per share in 2022. Regardless, earnings remain well above pre-pandemic levels, yet the stock is trading around levels it has traded at since the early 2010s. With the new inflationary environment, Weyerhaeuser’s timberland should be worth a lot more.

AvalonBay Communities (AVB)

AvalonBay Communities (NYSE:AVB) is one of the nation’s largest apartment owners. As of June 2022, AvalonBay directly or indirectly owned 89,037 apartments. These holdings are primarily in top-tier markets such as New York, California and Washington, D.C.

AvalonBay is firing on all cylinders right now. Between inflation and the hot housing market, AvalonBay was able to raise rents, 9% on average from January to May. Despite the price hikes, the firm’s average occupancy managed to climb slightly as well.

The general takeaway is that while it’s ever-more-expensive to rent an apartment, being a landlord is increasingly lucrative. For investors, AVB stock is a great way to profit from the inexorable climb in the nation’s cost of living.

Despite the positives, AVB stock has gotten caught up in the broader rough market, with shares down 14% year-to-date. Thanks to that, the firm’s dividend yield is now 3%.

Boston Properties (BXP)

Boston Properties (NYSE:BXP) is the largest publicly traded American office developer and operator. It has primarily focused on markets such as Boston, New York and San Francisco.

BXP stock was trading for around $140 per share prior to the pandemic. Unlike most things hit hard by Covid-19, Boston Properties has failed to recover meaningfully. Shares are trading for just $90 today.

At this valuation, Boston Properties is going for less than 12x funds from operations. Traditionally, this sort of business would trade for closer to 20x FFO. It’s possible that offices never recover to their prior glory. Even if so, however, Boston Properties tends to own among the best properties in the country’s most attractive markets. Its offices should still hold great appeal in the new economic landscape.

Shares are now up to a 4.4% dividend yield thanks to the drop in the firm’s stock price.

CubeSmart (CUBE)

CubeSmart (NYSE:CUBE) is the third-largest American REIT in the self-storage space. Self-storage is a particularly attractive REIT category in the current economic environment.

That’s because of two primary reasons. One, the housing market is volatile, with many people looking to buy and sell properties amid fast-changing market conditions. And, historically, when people move, they often need more self-storage space. Self-storage was one of the best categories of REITs in 2009, amid the housing market bust, since so many people were downsizing, moving to apartments, or otherwise economizing their living conditions.

The other favorable attribute is that self-storage operators tend to have month-to-month leases. This means that when inflation is running hot, such as now, CubeSmart can raise prices for its customers almost immediately. This makes CubeSmart stand out compared to other types of REITs which have longer-term leases with less pricing flexibility.

Vornado Realty Trust (VNO)

Vornado Realty Trust (NYSE:VNO) is an office REIT focused on the New York City market. It owns more than 20 million square feet of prime office space in Manhattan. Key tenants include the likes of business media giant Bloomberg and Amazon’s (NASDAQ:AMZN) New York City headquarters. Vornado also operates a good deal of real estate space in New York, including in world-class districts such as Fifth Avenue and Times Square.

The bearish arguments for both New York City and office space are well-known. Working from home has eroded the need for office space.

However, for investors that believe that New York will rebound as tourists come back and offices reopen, VNO stock is a standout bargain today. Shares traded as high as $80 in the mid-2010s but are selling for just over $30 today. Meanwhile, shares pay a dividend yield of 7%.

On the date of publication, Ian Bezek held a long position in CUBE, VNO, and AMT stock . The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.