Top Equity REIT Stocks to Buy as Market Conditions Improve

The REIT and Equity Trust - Other industry constituents are poised to benefit from strong specialized demand in industrial, data center, healthcare and modern office properties. E-commerce expansion, AI workloads and aging populations support steady occupancy, while low interest rates and disciplined capital strategies provide flexibility for portfolio optimization and long-term expansion. Amid this, Prologis, Inc. PLD, Postal Realty Trust, Inc. PSTL and Industrial Logistics Properties Trust ILPT are well-poised to benefit.

However, asset obsolescence remains a key risk. Older offices, warehouses and hospitality properties may struggle as tenants increasingly favor technology-enabled, flexible and amenity-rich spaces, leaving legacy assets less competitive.

About the Industry

The Zacks REIT and Equity Trust - Other sector comprises a diverse collection of REIT stocks representing various asset categories, including industrial, office, lodging, healthcare, self-storage, data centers, infrastructure and more. Equity REITs lease out space within these properties to tenants, generating income through rental payments. Economic growth assumes a central role within the real estate sector as economic expansion directly correlates with higher demand for real estate, increased occupancy rates and greater bargaining power for landlords to command higher rental rates. Moreover, the performance of Equity REITs hinges on the specific dynamics of their underlying assets and the geographic location of their properties. It is imperative to thoroughly explore the fundamentals of these asset categories before making any investment decisions.

What's Shaping the Future of the REIT and Equity Trust - Other Industry?

Specialized Real Estate Demand Enhances Sector Growth Visibility: The real estate landscape is increasingly influenced by asset classes that enable digital activity, operational efficiency and essential services. Industrial properties continue to see solid demand as e-commerce growth encourages occupiers to favor strategically located, high-functioning facilities that can support automation and rapid distribution. Data centers and digital infrastructure assets are benefiting from sustained secular tailwinds, driven by expanding cloud adoption, artificial intelligence workloads and rising requirements for high-speed connectivity. Healthcare-oriented real estate remains structurally resilient, supported by aging populations that continue to drive consistent demand for medical offices and care-related facilities as long-term, essential assets. Office markets are beginning to stabilize, with improving attendance trends supporting demand for newer, well-designed buildings. Companies are selectively reinvesting in collaborative, amenity-rich workplaces to enhance employee engagement and retention.

Financial Discipline and Capital Access Boost REIT Growth Potential: REITs are well-positioned to capitalize on a favorable interest rate environment, which supports property valuations and enables effective long-term capital planning. In periods of market volatility, their steady income streams make them particularly appealing to investors seeking reliable yields. Prudent financial strategies, including the use of fixed-rate debt with extended maturities, help mitigate interest rate risks, while access to unsecured financing enhances operational flexibility. Low borrowing costs further allow REITs to optimize their portfolios and address strategic initiatives efficiently. Amid tighter bank lending, REITs’ robust balance sheets and multiple avenues for capital, whether through equity, debt or institutional joint ventures, provide a distinct competitive edge. These structural advantages position REITs for potential growth this year and beyond.

Asset Obsolescence Emerges as a Core Risk: The most pressing issue is the widening divide between assets positioned for future use and those increasingly rendered obsolete. In office markets, occupiers are gravitating toward newer, flexible buildings with advanced technology and amenities that support productivity and employee experience, leaving aging properties behind. Industrial tenants are also lifting requirements, favoring facilities capable of supporting automation and data-driven logistics, which challenges older warehouse stock. Data centers continue to see strong demand, but growth is constrained by practical limits such as power availability. In hospitality, traditional formats face sustained pressure as alternative accommodation options expand and travel habits shift. Meanwhile, life science tenants are exercising caution, reevaluating expansion plans and moderating leasing amid economic uncertainty. This divergence between modern, high-quality assets and legacy properties represents the sector’s most enduring structural risk.

Zacks Industry Rank Indicates Bright Prospects

The Zacks REIT and Equity Trust - Other industry is housed within the broader Finance sector. It carries a Zacks Industry Rank #96, which places it in the top 39% of around 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates healthy near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of the northward revision of funds from operations (FFO) per share outlook for the constituent companies in aggregate. Looking at the aggregate FFO per share estimate revisions, it appears that analysts are gaining confidence in this group’s growth potential of late. Since June-end, the industry’s FFO per share estimates for 2025 and 2026 have moved marginally north. 

Before we present a few stocks that you might want to consider for your portfolio, let’s take a look at the industry’s recent stock market performance and valuation picture.

Industry Lags Stock Market Performance

The REIT and Equity Trust - Other Industry has underperformed the S&P 500 composite and the broader Zacks Finance sector in a year.

The industry has risen 5.9% during this period compared with the S&P 500’s growth of 21.8% and the broader Finance sector’s 19.4% increase.

One-Year Price Performance

Industry's Current Valuation

On the basis of the forward 12-month price-to-FFO ratio, which is a commonly used multiple for valuing REIT - Others, we see that the industry is currently trading at 15.32 compared with the S&P 500’s forward 12-month price-to-earnings (P/E) of 23.45. The industry is also trading below the Finance sector’s forward 12-month P/E of 17.35. This is shown in the chart below.

Forward 12 Month Price-to-FFO (P/FFO) Ratio

Over the last five years, the industry has traded as high as 22.27X and as low as 12.84X, with a median of 15.80X.

3 REIT and Equity Trust - Other Stocks to Buy

Postal Realty Trust: This REIT specializes in acquiring and managing properties leased primarily to the United States Postal Service (“USPS”), ranging from last-mile post offices to industrial facilities across 49 states and one territory. The company owns and manages a large portfolio of postal real estate, which was 99.8% occupied with approximately 7.1 million net leasable square feet at year-end 2025, benefiting from USPS’ critical logistics network and long-standing tenancy. Its focused niche strategy targets the large, fragmented USPS-leased property market, and it has grown its asset base substantially since its 2019 IPO.

Postal Realty is a compelling buy due to its stable tenant base and growth execution. In 2025, the company acquired 216 USPS-leased properties (approximately 642,000 net leasable interior square feet) for $123 million at a 7.7% cash cap rate, reflecting disciplined capital deployment and expansion of its portfolio. It also maintains high occupancy near 99.8% and a strong balance sheet with 89% of debt at fixed rates and no maturities until 2028, supporting predictable cash flows. 

PSTL currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for the company’s 2025 and 2026 revenues calls for a year-over-year increase of 24.17% and 12.14%, respectively. The stock has rallied 12.8% in the past three months. The consensus mark for 2025 and 2026 FFO per share has been revised upward over the past two months to $1.30 and $1.38, suggesting a 12.07% and 6.54% jump year over year, respectively.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Industrial Logistics Properties Trust: This REIT is focused on owning and leasing high-quality industrial and logistics properties across the United States. Its portfolio includes 411 properties with approximately 59.9 million rentable square feet in 39 states, serving a diverse base of tenants with stable lease structures. About 76% of annualized rental revenues come from investment-grade tenants (or their subsidiaries) and Hawaii land leases, highlighting the quality and geographic diversification of its assets. 

ILPT’s investment case is supported by solid fundamentals and positive leasing economics as demonstrated in its third-quarter results. Consolidated occupancy remains strong at around 94%, and leasing activity has generated significant rent roll-ups, with resets more than 22% above prior rates for the same space. The company’s same-property net operating income and cash-basis NOI trends demonstrate resilient cash flow generation, while disciplined capital management has improved financial flexibility. 

ILPT currently sports a Zacks Rank #1. The Zacks Consensus Estimate for 2025 and 2026 FFO per share has been raised 10.5% and 11.8% over the past two months, respectively. The stock has risen 11.1% in the past three months.



Prologis: It is the world’s largest industrial real estate investment trust, owning and operating a global portfolio of logistics facilities, warehouses and distribution centers. Its scale and market leadership position it to capitalize on structural demand for supply-chain real estate and growth in e-commerce and fulfillment services. Prologis’ assets consistently deliver high occupancy levels, with average portfolio occupancy around 95%, and strong rent economics, reflecting resilient tenant demand even in dynamic markets. Moreover, with 5.2 gigawatts of power either secured or in advanced stages, Prologis now represents one of the largest owners of utility-fed power suitable for data centers. For investors, the company’s fast-growing data center platform is adding a new layer of enthusiasm.

Prologis is a compelling, long-term stock due to its robust fundamentals and disciplined deployment. It has ample liquidity (around $7.5 billion) and a strong balance sheet, enabling strategic developments and acquisitions at attractive yields. Same-store net operating income and rent growth remain healthy, with cash same-store NOI up around 5% and net effective rent change of approximately 49% in recent reporting periods, illustrating pricing power and operating momentum. With diversified global exposure and consistent demand drivers, Prologis’ platform is well-positioned for stable cash flow and shareholder returns.

Prologis currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for PLD’s 2025 revenues calls for an 8.72% increase year over year. Moreover, the Zacks Consensus Estimate for 2025 and 2026 FFO per share suggests a 4.32% and 4.72% rise, respectively. The stock has appreciated 11.8% in the past three months.



Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Prologis, Inc. (PLD): Free Stock Analysis Report
 
Industrial Logistics Properties Trust (ILPT): Free Stock Analysis Report
 
Postal Realty Trust, Inc. (PSTL): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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