Buying real estate is one of the oldest ways of investing, and it has changed along with the evolution of the financial system. Renting out your space looks like a great option if you don’t see it as passive income, because constant visits to check on the condition of the property can turn into a full-time job. Real estate stocks can take the burden of property maintenance off investors’ shoulders and help with diversification, even when the capital is low.
36% of Americans believe that renting out commercial space or apartments is the best long-term investment option. Spot investing can bring short-term peace of mind because it seems clear: you can assess the degree of wear and tear on a building and the quality of the materials used. Therefore, it is important to consider ways to buy a stake in hundreds or thousands of properties at once. Buying real estate stocks can protect against such crises, as large companies, for the most part, are not limited to the geographical boundaries of a particular city but operate internationally in the interests of their investors.
CBRE Group (CBRE)
Real estate market players need intermediaries, high-quality consulting, management and valuation services. CBRE Group (NYSE:CBRE) provides these activities at the highest level in the international space, not being afraid of complex and long-term cases. In this context, it is not surprising that the company generated revenues of $8.39 billion in Q2 2024. The result was 8.7% higher than the same indicator last year, so investors received additional confirmation of the business’s prosperity. Analysts also underestimated the company, as they predicted that earnings per share (EPS) would be around $0.69, which is $0.12 less than the announced results for the quarter. With a return on equity of 12.74%, CBRE has succeeded in the face of market volatility.
Through July of this year, CBRE has consolidated and surpassed the price heights seen in 2021. After previous highs of around $110, this representative of real estate stocks has set new records since July 26, approaching $114. The upgrade of CBRE Group’s rating by Evercore ISI also led to an increase in the target price, which now stands at $123.
American Tower (AMT)
Creativity and open-mindedness are a significant advantage of American Tower (NYSE:AMT), which has gone beyond the standard idea of real estate stocks after forming a joint venture between its subsidiary, CoreSite, and Stonepeak. The plan is to build a new data center (CoreSite DevCo JV) in Denver, Colorado. The 18-megawatt data center could be a step into the future for the company founded in the last century. The planned investment of more than $250 million can elevate American Tower among the creators of modern infrastructure, but even before the announcement, the company was showing an upward trend.
Since April 2024, AMT’s price has been steadily climbing to reach its current level of $221. For Q2, the company reported total revenue of $2.90 billion, which exceeded expert expectations ($2.82 billion). EBITDA also exceeded the previous year’s figure and amounted to $1.89 billion, which, together with a high EBITDA margin (65.2%), indicates the company’s operational efficiency. American Tower’s diversified portfolio with 224,000 communication objects creates a solid platform for further growth.
Extra Space Storage (EXR)
Institutional investors favor real estate stocks for their reliability and stability in terms of cash flow generation. Such institutions own 99.11% of Extra Space Storage (NYSE:EXR) and see this asset as the future. Toronto Dominion Bank (NYSE:TD), despite its dominance in the shareholding of EXR (59.2%), acquired another 82,282 shares. This move may indicate that the bank’s analysts are highly positive about EXR’s prospects in the context of its 10.69% growth over the past year. The annual high of $164.4 is now a thing of the past, as the price crossed $167 in July.
Q2 2024 brought the company an increase in revenue to $810.66 million and growth in terms of funds from operations (FFO), which reached $2.06 per share. Revenue in the same period last year amounted to $511.39 million, which may indicate an increase in the company’s operating performance. The successes led Wells Fargo to change the target price of EXR from $160.00 to $175.00, which is a green light to buy the stock.
On the date of publication, Julia Magas did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.