Investing in real estate requires expert knowledge, physical property, and great deal of time. It also requires a great level of commitment that isn’t suited for everybody.
If you’re looking for a way to invest in real estate without actually having to do any of the acquisitions, renovations, and leasing yourself, then look no farther than real estate investment trusts – or REITs.
What is a REIT?
A REIT is a company that finances income producing real estate opportunities. These opportunities can be very diverse and three are many different industries that a REIT can qualify under including hospitality, office, residential, student housing, and even cell towers.
Many of these companies are publicly traded and you can invest in them right now from your phone using an app like Robinhood. We’ve broken down a list of the best REITs in Texas.
- Ashford Hospitality Trust
- Braemar Hotels & Resorts, Inc.
- Camden Property Trust
- CIM Commercial Trust Corp.
- CorePoint Lodging
- Crown Castle International Corp
- CyrusOne Inc.
- Invitation Homes
- Netsreit
- NexPoint Real Estate Finance
- NexPoint Residential Trust, Inc.
- Spirit Realty Capital
- Summit Hotel Properties, Inc.
Ashford Hospitality Trust — 75% Funded
Stock Ticker: AHT
Listing Status: Public
Headquarters: Dallas, TX
Industry: Hospitality
Website: https://www.realtymogul.com/investment-opportunity/1910447
Ashford Hospitality Trust is one of two REIT platforms on this list that is managed by Ashford Inc.
As the name suggests, it specializes in the hospitality industry, and its portfolio mainly includes premium level hotels like the Sheraton and Marriott, as well as Hilton Brand hotels like the Embassy Suites.
How many properties does Ashford Hospitality Trust own and operate?
In 2022, REIT platform Ashford Hospitality Trust controls 99 hotel properties in 27 different states that have a total of 22,403 rooms.
Their hotel property holdings are divided into five categories: Luxury (3 properties), Upper Upscale (46 properties), Independents (8 properties), Upscale (36 properties), and Upper Midscale (6 properties).
Risk Factors
- The stock price of this REIT is more susceptible to react negatively as it pertains to government pandemic policies.
- Their hotels were not ready to implement the proper safety precautions that all businesses have been struggling to implement throughout the pandemic. But the company is actively working on strategies to combat this.
- In 2020, the company closed $450 million of strategic corporate financing to provide enough liquidity to get them through the pandemic. Their parent company, Ashford Inc, is focusing on a recovery in the Hotel business by the year 2024.
Braemar Hotels & Resorts, Inc.
Stock Ticker: BHR
Listing Status: Public
Headquarters: Dallas, TX
Industry: Hospitality
Website: www.bhrreit.com
Braemar Hotels & Resorts is the other REIT platform mentioned on this list that is managed by Ashford Inc. BHR focusses strictly on luxury hotels and top of the market property acquisitions.
They have a laser focused approach on obtaining properties at the absolute top of the market locations, including water fronts, business hubs, and other premier locations. For example, in the third quarter of last year, the company acquired the “Mr. C” Beverly Hills Hotel in the heart of West Los Angeles for $77.9 million.
How many properties does Braemar Hotels & Resorts, Inc own and operate?
In 2022, Braemar Hotels & Resorts currently operates 14 different hospitality properties in premier locations in 6 different states. The hotels that occupy their properties have a total of 3,875 rooms.
Risk Factors
- Although the pandemic is also a risk factor for BHR, the implications are different because of the focus on luxury hotels which have not been as negatively impacted
- Litigation from customers catching the virus is a risk, and cancellations, still negatively impact the company – but overall, the pandemic has not affected the luxury hotel business as much as lower-level hotel businesses
American Campus Communities, Inc
Stock Ticker: ACC
Listing Status: Public
Headquarters: Austin, TX
Industry: Residential, Student Housing
Website: www.americancampus.com
American Campus Communities, Inc is a publicly traded REIT and is the nation’s largest developer, owner, and manager of high-quality student housing.
The company has one of the most (if not the most) desirable portfolios is student housing as their properties are located with a median distance of only one-tenth of a mile from campus. The company primarily focuses on on-campus and pedestrian-to-campus properties.
How many properties does American Campus Communities own and operate?
American Campus Communities Inc owns and operates 166 properties in 69 different markets. There are a total of 111,877 beds throughout their properties and the company has an enterprise value of $10.6 billion.
Risk Factors
- Although the pandemic was a serious concern, over 95% of student returned to campus, showing resiliency through Covid-19
- There is generally a higher turn-over and wear and tear issue in student housing as well as an increased liability risk as college students tend to act a little more wildly
Camden Property Trust
Stock Ticker: CPT
Listing Status: Public
Headquarters: Houston, TX
Industry: Multifamily
Website: www.camdenliving.com
Camden Property Trust is a REIT that focuses specifically on multi-family home-apartment communities. Their acquisition strategy includes seeking out 15 to 20 year-old apartment communities, updating them, and then renting them out.
That being said, the company made four major acquisitions in 2021 that included major apartment complexes that were all built in 2016 or later. Their average renter is about 30 years old, makes about $100,000 annually, and an average number of 1.7 occupants per rental unit.
How many properties does Camden Property Trust own and operate?
As of December 31st, 2021, Camden Property Trust owns and operates 170 properties containing 58,162 apartment homes. They have properties that extend to both coasts in the USA however most of their properties are located in the South, with the DC area being the northernmost point.
Risk Factors
- Like all REITs in the apartment complex industry, the pandemic has resulted in government mandates that have potential negative effects on the company’s stock price.
- CPT has had to halt evictions and waive late fees, and their tenants’ abilities to make a livable income is a large risk factor.
- Government incentives for potential tenants also may help be a risk factor as some renters or home buyers opt for alternative living-place solutions
CIM Commercial Trust Corp.
Stock Ticker: CMCT
Listing Status: Public
Headquarters: Dallas, TX
Industry: Office, Retail, Multifamily, Hospitality
Website: www.cimcommercial.com
CIM Commercial Trust Corporation is a REIT that specializes in Class A and creative office properties – primarily located in the Los Angeles, San Francisco, and Austin metropolitan areas. They have a high affinity for technology and media companies for their office space.
However, they are a REIT with a very diverse portfolio with assets in the hospitality, multifamily, retail spaces as well. If there is an opportunity to add to their portfolio, they will jump on it – including opportunities with currently owned assets.
Many of their future opportunities include same store opportunities – that is buildings that haven’t fully met their occupancy rate and buildings that have been newly constructed by the company. For example, their occupancy rate for the Sheraton Grand improved to 70% in September 2021 – up from 20% over the course of only a single year!
How many properties does CIM commercial Trust Corp own and operate?
CIM commercial Trust Corp currently owns 10 office properties, 1 hotel with 503 rooms, and 2 parking assets. They have 3 properties in Washington DC, 2 in Austin, Texas, 7 in Los Angeles California, and 4 in San Francisco California.
Risk Factors
- Working from home is more popular now than it ever was. Office and hospitality were two of the industries that were hit the hardest due to the pandemic.
- This is represented in the company’s occupancy rate, where the REIT sees some of its largest opportunities for same store revenue increasements. A major indicator to keep an eye on throughout 2022 is the company’s occupancy rate and how it improves
CorePoint Lodging
Listing Status: Public
Stock Ticker: CPLG
Headquarters: Irving, TX
Industry: Hospitality
Website: www.corepoint.com
CorePoint Lodging is one of the few hospitality REITs that focuses mainly on midscale and upper midscale hotels. Their suburban market locations represent more than 50% of their portfolio, and transient and leisure travel is a major part of their business strategy.
But CorePoint has been liquidating non-core assets for several years to pay down debt, and the company is now going private.
It was announced in November of 2021 that CorePoint was to be acquired for $1.5 billion (all cash) in a joint venture between affiliates of Highgate and Cerberus Capital Management, L.P. This acquisition is expected to be completed sometime in the first quarter of 2022.
How many properties does CorePoint Lodging own and operate?
In 2022, CorePoint Lodging owns and operates 157 midscale and upper-midscale hotels with a total of 21,691 rooms between them. Most of these properties are La Quinta branded hotels located in suburban areas, around metropolitan centers, where there is a demand for throughway hotel stays (those that are driving to an ultimate destination).
Risk Factors
- In 2021, CPL was acquired by Highgate (a leading real estate investment and hospitality management company) and Cerberus (a global leader in alternative investing). It was sold for under what most investors thought it was worth.
- There is a risk the deal could fall through before it’s consummated.
Crown Castle International Corp
Stock Ticker: CCI
Listing Status: Public
Headquarters: Houston, TX
Industry: Communications, 5G
Website: www.crowncastle.com
Crown Castle International Corp is a REIT that specializes in building out infrastructure involved in shared communication, connectivity, and networking. They do this by acquiring and operating cell towers, small cells, and fiber solutions.
Their diverse portfolio allows them to capitalize on 5G deployment, which is being pioneered by many different technology companies that will be looking to use their shared infrastructure. This will be a major catalyst for the smart city boom – where public transportation, autonomous cars, traffic lights, and even wearables will all be wired into the “internet of things.”
With their shared model, their customers do not need standalone, singular infrastructure. This is beneficial for the clients, investors, and customers. One of those customers is T-Mobile, who just signed a 12-year agreement with Crown Castle that supports the continued buildout of their 5G network.
How many assets does Crown Castle International Corp own and operate?
In 2022 Crown Castle International Corp owns and operates more than 40,000 cell towers, 80,000 small cells, and 80,000 route miles of fiber. From 2011 to Q3 of 2021, the company has spent more than $9 billion acquiring cells towers, and $11 billion acquiring route miles of fiber.
Risk Factors
- In 2020, Elliot Management CO-CEO and major CCI investor Paul Singer, criticized the company for investing too much in Fiber without having much to show for it.
- The future of 5G still is somewhat unclear. There have been many reports that 5G is not the technical advancement that many have claimed that it will be, and that it is only slightly faster than 4G
CyrusOne Inc.
Stock Ticker: CONE
Listing Status: Public
Headquarters: Dallas, TX
Industry: Data Centers
Website: www.cyrusone.com
CyrusOne Inc. is a data center REIT focused on serving companies in the Fortune 1000 at the global scale. They currently serve customers located in the United States, Europe, and South America.
CyrusOne Inc is another company that will soon be going private. It was announced on November 15, 2021, that the company was to be acquired by KKR and Global Infrastructure Partners in a $15 Billion all cash transaction. This equates to a purchase price of $90.50 per share.
How many data centers does CyrusOne Inc own and operate?
CyrusOne Inc owns and operates 52 data centers across the globe with 35 in North America, 14 in Europe, and in 3 South America. They are currently working on 4 additional data centers in North America in various US States that should be operational soon.
Risk Factors
- CyrusOne Inc was purchased in Q4 of 2021 and will be taken private. As with all company acquisitions, there is a chance that the deal could fall through before it is consummated.
Invitation Homes
Stock Ticker: INVH
Listing Status: Public
Headquarters: Dallas, TX
Industry: Single-Family Homes
Website: www.invitationhomes.com
Invitation homes is a REIT focused on leasing single-family homes in high-demand areas across the United States. The company boasts the most liquid real estate asset class in the world and has the capability to manage each unit on an individual basis.
They can accomplish this by targeting a sticky and stable resident base. The average annual income of their residents’ hovers around $110,000 across two wage earners. Their tenants have an average age of about 39 years-old but they foresee that dropping in the future with the pent up demand of millennials.
How many properties does Invitation Homes currently own and operate?
In 2022, Invitation Homes owns and operates more than 80,000 homes across the United States – with 95% of their revenue coming from Western US, the Sunbelt, and Florida. In Q1 of 2021 alone, the company acquired $636 million in homes.
Risk Factors
- INVH faces various risk factors like the housing market, interest rates, and more specifically, credit risks related to their residents
- Dallas Tanner, the CEO of Invitation Homes, has stated that he is not concerned with a potential housing bubble despite rising housing prices and is optimistic about lease growth
Netsreit
Stock Ticker: NTST
Listing Status: Public
Headquarters: Dallas, TX
Industry: Retail
Website: www.netsreit.com
Netsreit is a REIT that focuses primarily on single-tenant net lease retail properties. In 2021 they had an impressive occupancy rate of 100%!
Their top tenants include huge brands including 7/11, Walgreens, Walmart, and CVS. These high-quality, well-known tenants, ensure that rent is going to be collected – even during times of extreme disruption like the current pandemic.
How many properties does Netsreit own and operate?
Netsreit currently owns and operates 220 properties in 40 different states. Their properties have a total of 5.5 million square feet and are distributed across 60 different tenants. Their high-quality diversified portfolio consists of 70.5% investment grade tenants.
Risk Factors
- Investment grade tenants offer more security as it pertains to collecting rent, however there is typically less negotiating leverage when working with larger companies
- One risk factor that is often associated with single-tenant net lease REITs is that a tenant that leases a large percentage of the properties could potentially leave
- However, Netsreit has a diverse portfolio has not “put all their eggs in one basket.”
NexPoint Real Estate Finance
Stock Ticker: NREF
Listing Status: Public
Headquarters: Dallas, TX
Industry: Commercial Mortgage
Website: www.nexpointfinance.com
NexPoint Real Estate Finance is a Mortgage REIT (mREIT) focused on investing in first-lien mortgage loans, mezzanine loans, preferred equity and common stock, and multi-family commercial mortgage-backed securities. The fund is one of three REITs managed by NexPoint (two of which are on the NYSE) and went public in February of 2020, just weeks before the pandemic hit.
NREF reduces risk by investing in assets in industries for which its team has a high degree of experience in. This includes both multi-family and single-family rental, self-storage, and hospitality sectors. They also focus on the top 50 metropolitan areas.
How many loans does NexPoint Real Estate Finance currently own?
NexPoint currently hold 68 loans with a total principal of over $1.5 billion. Their loans are split between 22 senior loans, 7 CMBS B-Pieces, 13 CMBS IO Strips, 22 Mezzanines, 3 Preferred Equities, and 1 Common stock.
Risk Factors
- Mortgage REIT dividends can be unpredictable. Over the past five years, six of the top residential mREITs both raised and lowered their common dividends. That being said, NREF is a commercial mREIT
- As with any commercial mortgage, risk of downgrade of any credit ratings assigned to NREF loans and investments
NexPoint Residential Trust, Inc.
Stock Ticker: NXRT
Listing Status: Public
Headquarters: Dallas, TX
Industry: Multi-family
Website: www.nexpointliving.com
NexPoint Residential Trust Inc. is a REIT focus on class B multi-family real estate properties, mainly in the Sunbelt region. The company typically pursues investments with a value-add component that enhances “life-style” amenities to “workforce” housing.
Their focus on middle-income families is a reaction to the demand for affordable housing, where they see a low inventory for Americans. The company believes that middle market Class “B” affordable housing will perform better than A & C in a recession and 67.9% of the total population can afford to live in a NXRT community.
NXRT is one of two REITs on this list that is managed by the NexPoint platform, and the company has 70 plus combined years of investment management experience.
How many properties does NexPoint Residential Trust, Inc own and operate?
In 2022, NexPoint Residential Trust, Inc owns and operates 37 properties, with a total of 14,205 units. The average monthly rent per unit is $1,149 and the company has a 95.6% occupancy rate.
Risk Factors
- NXRT experienced strong demand throughout the pandemic, though it continues to be a risk
- NXRT manages risks, including liquidity, credit risks, and interest rate risks, by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments
- For example, the company has risks associated with a floating rate indebtedness, but mitigates these risks by entering into interest rate swap agreements with various banks (Truist Bank being one of them)
Spirit Realty Capital
Stock Ticker: SRC
Listing Status: Public
Headquarters: Dallas, TX
Industry: Retail
Website: www.spiritrealty.com
Spirit Realty Capital is a triple net-lease REIT focused on investing in operational essential retail real-estate. The company had an exceptionally high standard of operational performance in 2021 including an occupancy rate of 99.7%, a lost rent of only 0.1%, and unreimbursed property costs of 1.4%
The company is also highly diversified when it comes to their tenants, with the top ten tenants making up only 23% of the customer base, while the top 20 tenant concentration is at 37%. That means that no single tenant, or even a handful of tenants can generate a worrisome amount of revenue loss at one time.
How many properties does Spirit Realty own and operate?
Spirit Realty currently. Owns 1,915 properties in a whopping 48 different states. They have 312 tenants in 27 different operationally essential retail industries including Dollar Tree, Walgreens, at home, Circle K, and many more well-known brands.
Risk Factors
- Triple net lease tenants are notoriously hard to replace if the company goes bankrupt or undergoes some other financial troubles and must vacate. That is one reason why it is extremely important that Spirit Realty always maintains a diverse portfolio of tenants
- There is a large amount of downside protection in triple-net lease REITs however on the flip side, that can mean that there is limited upside
Summit Hotel Properties, Inc.
Stock Ticker: INN
Listing Status: Public
Headquarters: Austin, TX
Industry: Hospitality
Website: www.shpreit.com
Summit Hotel Properties, Inc is a REIT focused on premium brand hotels with efficient operating models. Every single one of their properties are in the high growth rate Sun Belt region.
The company has a very specific and strategic rationale for acquisition. The average age of their portfolio is only 3.8 years and 66% of the guestrooms and 73% of hotel value has been developed since 2015. This means that most of the buildings they acquire are extremely new.
How many properties does Summit Hotel Properties Inc own and operate?
In 2022, Summit Hotel Properties Inc owns and operates 27 different premium brand hotels with over 3,700 guestrooms. The company is in ten different markets and 80% of the guest rooms are branded Marriott or Hilton.
Risk Factors
- The Sun Belt is a very popular region for hotels and hotel REITs. There is a good amount of competition and there is potential for the market to become oversaturated.
- Insiders at INN did not purchase any sales in the last year, and the Executive Chairman, Daniel Hansen, even sold shares when the price was below the current price, which is generally discouraging but not a major indicator
