Real estate investment trusts (REITs) present a unique investment opportunity in today's market. Despite facing challenges in 2022 due to fears of rising interest rates, REITs are actually performing well and offer attractive valuations. This article highlights three top REITs to consider for 2023.
REIT #1: NewLake Capital Partners, Inc. (OTCQX:NLCP)
NLCP specializes in cannabis cultivation facilities and retail dispensaries. While this sector may be perceived as riskier, NLCP effectively manages these risks through limited license states and strong rent coverage ratios. NLCP's largest tenant, Curaleaf Holdings, Inc., recently reported substantial growth, making NLCP an opportunistic investment. With a resilient balance sheet, NLCP is well-positioned to capitalize on future opportunities.
REIT #2: AvalonBay Communities, Inc. (AVB)
AVB is a blue-chip REIT with a stellar track record, consistent dividend growth, and an A-rated balance sheet. With a vast portfolio of Class A apartment communities in supply-constrained markets, AVB has significant potential for long-term growth. Despite its strong performance, AVB's share price does not reflect its true value, making it an attractive investment opportunity.
REIT #3: EPR Properties (EPR)
EPR Properties is a net lease REIT that invests in experiential properties such as golf complexes, movie theaters, and waterparks. While movie theaters have faced challenges in recent times, the market has overlooked key factors that support EPR's resilience. EPR has a strong track record, a solid balance sheet, and a rapidly recovering box office. Despite its low valuation, EPR offers significant upside potential and a compelling dividend yield.
In conclusion, investing in high-quality REITs for 2023 presents an excellent opportunity to capitalize on discounted valuations. By considering NLCP, AVB, and EPR, investors can potentially benefit from their growth prospects, attractive dividends, and undervalued prices. It's important to note that investing in securities carries risks, and investors should conduct thorough research before making any investment decisions.
Editor's Note: This article discusses securities that do not trade on major U.S. exchanges. Please consider the associated risks before investing.