Top 10 Undervalued REITs for 2025: High-Yield Stocks at Discounted Prices
Real estate investment trusts (REITs) continue to be an attractive option for income investors, thanks to their high-yield dividends. As of February 9, 2025, the REIT sector appeared to be undervalued by 6.8%, according to Morningstar. However, these stocks remain sensitive to interest rate movements. While the sector initially performed well in mid-2024 due to falling rates, rising interest rates in the fourth quarter caused underperformance.
Despite these fluctuations, certain REITs stand out as great investment opportunities due to their significant discounts relative to their fair value estimates. Here are the top 10 undervalued REIT stocks for 2025, each trading at least 20% below their estimated fair value.
1. Pebblebrook Hotel (PEB)
Pebblebrook Hotel remains the most discounted REIT on the list, trading 47% below its fair value estimate of $23.50 per share. As the largest U.S. lodging REIT focused on independent and boutique hotels, Pebblebrook has benefited from a post-pandemic recovery in leisure travel. The company’s strategic merger with LaSalle Hotel Properties in 2018 doubled its size while maintaining efficiency. With recent renovations completed across its portfolio, revenue per available room (RevPAR) growth is expected to remain strong. However, competition from online travel agencies and Airbnb could limit pricing power.
2. Park Hotels & Resorts (PK)
Park Hotels & Resorts is another lodging REIT that is significantly undervalued, trading 44% below its fair value estimate of $23 per share. With a forward dividend yield of 10.82%, it offers the highest yield among the top REITs. Since its spinoff from Hilton in 2017, Park has focused on high-quality domestic properties in major gateway markets. While its hotels faced significant pandemic-related losses, recovery efforts and recent renovations have positioned it for future growth. However, oversupply in key markets and price transparency from online platforms remain challenges.
3. Kilroy Realty (KRC)
Operating in the office sector, Kilroy Realty is trading 38% below its fair value estimate of $59 per share. With a forward dividend yield of 5.87%, the company benefits from a high-quality portfolio concentrated in technology and life sciences hubs along the U.S. West Coast. Kilroy has adapted to changing market conditions by focusing on sustainability and developing properties that align with evolving workplace trends. However, high office vacancy rates and the slow return to in-person work continue to weigh on the sector.
4. Healthpeak Properties (DOC)
Healthpeak Properties is undervalued by 36%, with a fair value estimate of $30.50 per share. Specializing in healthcare real estate, the company offers a 6.23% forward dividend yield. Healthpeak has strategically shifted away from senior housing and now focuses on medical office and life science properties, benefiting from long-term industry tailwinds such as the aging population and increased demand for high-quality healthcare facilities. The company’s 2024 merger with Physicians Realty Trust strengthened its portfolio, adding 16 million square feet of medical office space.
5. Crown Castle International (CCI)
Crown Castle, a telecommunications infrastructure REIT, is currently trading 34% below its fair value estimate. The company operates cell towers and fiber networks, benefiting from the ongoing expansion of 5G networks. While interest rate fluctuations have impacted its stock performance, Crown Castle’s steady revenue from long-term leases and high demand for digital infrastructure make it a strong long-term investment. The REIT offers a forward dividend yield of 6.98%.
6. Americold Realty Trust (COLD)
Americold Realty specializes in temperature-controlled storage and logistics for the food industry. Trading at a significant discount, this REIT benefits from the essential nature of its assets, as demand for cold storage continues to grow. Despite short-term pressures from interest rates and economic uncertainty, Americold’s strong fundamentals and long-term contracts position it well for stable cash flow.
7. Realty Income Corp (O)
Known as the “Monthly Dividend Company,” Realty Income remains a top choice for income-focused investors. This retail-focused REIT owns a diversified portfolio of properties leased to tenants in recession-resistant industries such as pharmacies and convenience stores. Although Realty Income’s stock has faced headwinds due to rising interest rates, its long-term stability and consistent dividend payments make it a strong investment.
8. Host Hotels & Resorts (HST)
Host Hotels & Resorts is a leading lodging REIT with a portfolio of high-end hotels and resorts. The company’s focus on premium properties in desirable locations has helped it maintain strong occupancy rates. While the hospitality industry faces challenges from fluctuating travel demand, Host Hotels’ diversified portfolio and operational efficiency make it a compelling investment at its current discount.
9. Sun Communities (SUI)
Sun Communities operates in the manufactured housing and RV park sector, offering a defensive investment opportunity within the REIT space. Demand for affordable housing and long-term community leases support the company’s stable revenue stream. Although interest rates have affected REIT valuations, Sun Communities’ strong fundamentals and recession-resistant business model make it an attractive option.
10. Invitation Homes (INVH)
Invitation Homes specializes in single-family rental properties, a sector that has seen significant growth due to rising homeownership costs. The company benefits from strong rental demand, particularly in suburban areas. While rising interest rates could impact financing costs, Invitation Homes’ ability to increase rents and maintain high occupancy rates supports its long-term investment appeal.
Conclusion
Despite recent volatility, these 10 undervalued REITs present strong buying opportunities for investors in 2025. With attractive dividend yields and discounted valuations, they offer a compelling mix of income and growth potential. However, investors should remain mindful of interest rate movements and sector-specific risks when considering their REIT allocations.
Real estate investment trusts (REITs) continue to be an attractive option for income investors, thanks to their high-yield dividends. As of February 9, 2025, the REIT sector appeared to be undervalued by 6.8%, according to Morningstar. However, these stocks remain sensitive to interest rate movements. While the sector initially performed well in mid-2024 due to falling rates, rising interest rates in the fourth quarter caused underperformance.
Despite these fluctuations, certain REITs stand out as great investment opportunities due to their significant discounts relative to their fair value estimates. Here are the top 10 undervalued REIT stocks for 2025, each trading at least 20% below their estimated fair value.
1. Pebblebrook Hotel (PEB)
Pebblebrook Hotel remains the most discounted REIT on the list, trading 47% below its fair value estimate of $23.50 per share. As the largest U.S. lodging REIT focused on independent and boutique hotels, Pebblebrook has benefited from a post-pandemic recovery in leisure travel. The company’s strategic merger with LaSalle Hotel Properties in 2018 doubled its size while maintaining efficiency. With recent renovations completed across its portfolio, revenue per available room (RevPAR) growth is expected to remain strong. However, competition from online travel agencies and Airbnb could limit pricing power.
2. Park Hotels & Resorts (PK)
Park Hotels & Resorts is another lodging REIT that is significantly undervalued, trading 44% below its fair value estimate of $23 per share. With a forward dividend yield of 10.82%, it offers the highest yield among the top REITs. Since its spinoff from Hilton in 2017, Park has focused on high-quality domestic properties in major gateway markets. While its hotels faced significant pandemic-related losses, recovery efforts and recent renovations have positioned it for future growth. However, oversupply in key markets and price transparency from online platforms remain challenges.
3. Kilroy Realty (KRC)
Operating in the office sector, Kilroy Realty is trading 38% below its fair value estimate of $59 per share. With a forward dividend yield of 5.87%, the company benefits from a high-quality portfolio concentrated in technology and life sciences hubs along the U.S. West Coast. Kilroy has adapted to changing market conditions by focusing on sustainability and developing properties that align with evolving workplace trends. However, high office vacancy rates and the slow return to in-person work continue to weigh on the sector.
4. Healthpeak Properties (DOC)
Healthpeak Properties is undervalued by 36%, with a fair value estimate of $30.50 per share. Specializing in healthcare real estate, the company offers a 6.23% forward dividend yield. Healthpeak has strategically shifted away from senior housing and now focuses on medical office and life science properties, benefiting from long-term industry tailwinds such as the aging population and increased demand for high-quality healthcare facilities. The company’s 2024 merger with Physicians Realty Trust strengthened its portfolio, adding 16 million square feet of medical office space.
5. Crown Castle International (CCI)
Crown Castle, a telecommunications infrastructure REIT, is currently trading 34% below its fair value estimate. The company operates cell towers and fiber networks, benefiting from the ongoing expansion of 5G networks. While interest rate fluctuations have impacted its stock performance, Crown Castle’s steady revenue from long-term leases and high demand for digital infrastructure make it a strong long-term investment. The REIT offers a forward dividend yield of 6.98%.
6. Americold Realty Trust (COLD)
Americold Realty specializes in temperature-controlled storage and logistics for the food industry. Trading at a significant discount, this REIT benefits from the essential nature of its assets, as demand for cold storage continues to grow. Despite short-term pressures from interest rates and economic uncertainty, Americold’s strong fundamentals and long-term contracts position it well for stable cash flow.
7. Realty Income Corp (O)
Known as the “Monthly Dividend Company,” Realty Income remains a top choice for income-focused investors. This retail-focused REIT owns a diversified portfolio of properties leased to tenants in recession-resistant industries such as pharmacies and convenience stores. Although Realty Income’s stock has faced headwinds due to rising interest rates, its long-term stability and consistent dividend payments make it a strong investment.
8. Host Hotels & Resorts (HST)
Host Hotels & Resorts is a leading lodging REIT with a portfolio of high-end hotels and resorts. The company’s focus on premium properties in desirable locations has helped it maintain strong occupancy rates. While the hospitality industry faces challenges from fluctuating travel demand, Host Hotels’ diversified portfolio and operational efficiency make it a compelling investment at its current discount.
9. Sun Communities (SUI)
Sun Communities operates in the manufactured housing and RV park sector, offering a defensive investment opportunity within the REIT space. Demand for affordable housing and long-term community leases support the company’s stable revenue stream. Although interest rates have affected REIT valuations, Sun Communities’ strong fundamentals and recession-resistant business model make it an attractive option.
10. Invitation Homes (INVH)
Invitation Homes specializes in single-family rental properties, a sector that has seen significant growth due to rising homeownership costs. The company benefits from strong rental demand, particularly in suburban areas. While rising interest rates could impact financing costs, Invitation Homes’ ability to increase rents and maintain high occupancy rates supports its long-term investment appeal.
Conclusion
Despite recent volatility, these 10 undervalued REITs present strong buying opportunities for investors in 2025. With attractive dividend yields and discounted valuations, they offer a compelling mix of income and growth potential. However, investors should remain mindful of interest rate movements and sector-specific risks when considering their REIT allocations.