KRC - 2 Top REIT Stocks to Buy in January
2024-01-03 06:35:00 ET
Real estate investment trusts (REITs) are income investments, so the rising interest rates over the past couple of years have been a big headwind. Why take on the risk of loss that comes with a stock purchase when you can get a CD with a 5% yield?
The answer is that the income a CD pays won't increase over time like the dividends being paid by Alexandria Real Estate Equities (NYSE: ARE) and Kilroy Realty (NYSE: KRC) . That's the foundation of the story, but there's more to know about these two office landlords.
Alexandria gets lumped into the office REIT subsector, which is appropriate. But it doesn't really own the type of offices that most of its peers own. Alexandria's portfolio is centered around medical research facilities. These assets are usually a combination of laboratory space and more traditional office space. It is a very specialized type of property and demand remains quite strong, noting the REIT's occupancy of 93.7% and rental rate increases of around 33% through the first three quarters of 2023 on renewing leases.
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2 Top REIT Stocks to Buy in January