Real estate is often seen as a valuable tool for investors to hedge against inflation and achieve substantial returns. While direct property ownership can be challenging, real estate investment trusts (REITs) offer an accessible alternative for individual investors to participate in the real estate market. REITs are companies that own, and usually operate, income-producing real estate across various sectors, distributing a significant portion of their income (typically at least 90%) to shareholders in the form of dividends. This distribution requirement is a key reason why REITs generally offer high dividend yields.
Beyond traditional REITs, the real estate sector also includes management and development companies that don’t necessarily own properties but provide services or develop real estate.
Here are eight of the top real estate stocks to consider in 2025, based on analysis from CFRA (as of December 24th data, with share prices and targets as of December 23rd):
| Stock | Upside Potential | Forward Dividend Yield* |
| Prologis Inc. (PLD) | 38% | 3.7% |
| American Tower Corp. (AMT) | 30% | 3.5% |
| Digital Realty Trust Inc. (DLR) | 23% | 2.7% |
| AvalonBay Communities Inc. (AVB) | 16% | 3.1% |
| CoStar Group Inc. (CSGP) | 24% | N/A |
| Equity Residential Properties Trust (EQR) | 18% | 3.7% |
| Ventas Inc. (VTR) | 32% | 3.1% |
| SBA Communications Corp. (SBAC) | 28% | 1.9% |
| *As of Dec. 24. |
Prologis Inc. (PLD)
Industry: Industrial REIT (logistics real estate)
CFRA Rating: Buy
Price Target: $144 (vs. $104.14 close on Dec. 23)
Analyst Commentary (Nathan Schmidt): Despite being down 22% in 2024 (the worst performer on this list), Prologis holds a unique portfolio of highly desirable properties in key locations, often protected by high barriers to entry due to zoning restrictions. Schmidt estimates Prologis’s land bank has the potential to create roughly $40 billion in value over time. He anticipates Prologis will maintain pricing power as supply growth slows in 2025.
American Tower Corp. (AMT)
Industry: Specialized REIT (wireless communications and broadcast towers)
CFRA Rating: Buy
Price Target: $240 (vs. $184.38 close on Dec. 23)
Analyst Commentary (Nathan Schmidt): Schmidt believes that the risks of a potential recession and a slowdown in telecommunication spending are already factored into American Tower’s current share price, suggesting potential for valuation upside in 2025. He highlights long-term drivers for tower demand, including unlimited data plans, mobile video streaming, and 5G band buildouts. Additionally, significant growth opportunities exist in international markets.
Digital Realty Trust Inc. (DLR)
Industry: Specialized REIT (data center, co-location, and interconnection solutions)
CFRA Rating: Buy
Price Target: $220 (vs. $178.47 close on Dec. 23)
Analyst Commentary (Kenneth Leon): Digital Realty Trust has performed strongly, up 32% in 2024 (the best on this list). Analyst Leon identifies it as a potential major beneficiary of the boom in AI technology investment, as AI growth will drive demand for data centers, co-location, and interconnection solutions. Further tailwinds include cloud services growth and ongoing digital transformation.
AvalonBay Communities Inc. (AVB)
Industry: Multifamily Residential REIT (upscale apartment communities)
CFRA Rating: Buy
Price Target: $258 (vs. $221.67 close on Dec. 23)
Analyst Commentary (Kenneth Leon): Leon states that AvalonBay’s portfolio is largely insulated from issues in the Sun Belt region, where new supply is causing rate and cost pressures. Its Class A properties in coastal markets benefit from high local housing prices, which deter many potential homebuyers and support strong rental demand. AvalonBay estimates that single-family homeownership costs approximately $2,000 per month more than renting in its primary markets.
CoStar Group Inc. (CSGP)
Industry: Real Estate Services (online marketplaces and commercial real estate research)
CFRA Rating: Buy
Price Target: $90 (vs. $72.74 close on Dec. 23)
Analyst Commentary (Nathan Schmidt): CoStar operates platforms like STR, Homes.com, and Apartments.com. Schmidt views CoStar’s business model as resilient through economic cycles, making it a potentially solid defensive investment. He expects Homes.com’s growth to exceed expectations as its user base expands. Furthermore, he notes that CoStar’s database is indispensable to its customers, granting the company significant pricing power.
Equity Residential Properties Trust (EQR)
Industry: Multifamily Residential REIT (diversified apartment properties)
CFRA Rating: Buy
Price Target: $84 (vs. $71.44 close on Dec. 23)
Analyst Commentary (Kenneth Leon): Leon highlights that Equity Residential’s markets feature a more affluent renter base compared to many other REITs, particularly those focused on the Sun Belt. He anticipates a rebound in many of Equity’s markets in 2025, specifically citing job growth in key markets like Seattle and San Francisco as a driver for rental demand.
Ventas Inc. (VTR)
Industry: Healthcare REIT (healthcare facilities)
CFRA Rating: Buy
Price Target: $78 (vs. $58.93 close on Dec. 23)
Analyst Commentary (Nathan Schmidt): Schmidt believes high-quality senior housing is at the beginning of a potential decade-long demand boom, driven by the maturing baby boomer generation. He estimates that the number of Americans aged 80 or older will grow at a 4.4% annual rate through 2030. Concurrently, low senior housing inventory growth has constrained supply, which should support occupancy and rental rates.
SBA Communications Corp. (SBAC)
Industry: Specialized REIT (global wireless communications tower network)
CFRA Rating: Buy
Price Target: $260 (vs. $203.28 close on Dec. 23)
Analyst Commentary (Nathan Schmidt): Schmidt considers SBA shares attractively valued, trading at a significant discount to its historical earnings multiple. While the current environment for tower REITs is challenging, he expects industry headwinds to subside in 2025 as the Federal Reserve potentially implements further interest rate cuts. Even in a difficult market, SBA has consistently demonstrated strong financial performance, with cash flow margins above 80% and returns on invested capital exceeding 10%.