Real Estate Investment Trusts can be a great choice for those who are interested in the real estate market but skittish about getting hands dirty by directly investing in properties themselves. Through REITs, investors can entrust their money to the hands of real estate companies who understand the market intimately, but finding the right REIT to invest in can be a difficult task, particularly if you don’t possess a deep understanding of the markets. While there are plenty of REITs that focus on well-understood property sectors like residential, industrial, and retail, it can behoove investors to pursue more esoteric REITs. That’s because they’re often less crowded with investors than more popular options. And since they’re less understood, these REITs can often be purchased at prices well below their value. Here are three REITs to consider if you’re looking to earn meaningful returns in 2019.
Corporate Office Properties
There’s a strong argument that OCP is undervalued, and that’s due to the government shutdown. Corporate Office Properties deals directly with U.S. government agencies to provide defensive structures. Their investments are typically highly specialized and necessitate an understanding of cybersecurity and research and development. The current shutdown could scare some investors off, but it’s critical to note that the shutdown shouldn’t affect their activities. The national security apparatus should remain functional and funded regardless of inter-party squabbles. While this REIT has taken a steep dive in value, that should stabilize sooner rather than later.
GEO has been in existence for over three decades, and they focus on providing management services for the corrections and detention industry. They currently manage about 75,000 beds in 64 facilities, and they contract directly to some federal and state agencies in the United States as well as in Australia, South Africa, and the UK. And while current moves towards prison reform could scare off investors, there’s no need. GEO has been savvy about future shifts in the sector and has started investing heavily in halfway houses to transition to future models of criminal justice.
Outfront is the largest out-of-home media company in North America. Essentially, they provide digital billboards and static displays to some of the biggest markets in the United States. It’s a specialty subsection of the real estate market that’s overlooked, but it’s also critically important. It’s a market that fluctuates with the health of the retail and service industries, and while there’s been some level of instability in the market recently, the risk of a recession in the near future seems unlikely. That makes an investment in Outfront Media a worthwhile investment, but investors should keep a close eye on the overall market for signs of a downturn.