In this article, we will take a look at the 10 Most Undervalued REIT Stocks to Buy Right Now.
On January 14, CBRE reported its forecasts that the annual U.S. GDP growth will drop to 2.0% in 2026, with deteriorating labor economic conditions and somewhat lower rates of inflation at 2.5%. Despite these hurdles, commercial real estate investment spending is predicted to rise by 16% in 2026 to $562 billion, roughly mirroring the pre-pandemic yearly average.
Overall, real estate stocks head into 2026 with a unique combination of positive momentum and unaddressed points of tension. While mortgage rates in the US dipped as 2025 came to a close, the housing market remains constrained, and commercial real estate fundamentals keep shifting dramatically by property type. Speaking on this, James Knightley, chief international economist at ING, said the following:
“Housing demand is constrained by a lack of affordability – high prices, elevated mortgage rates – while rising fears of joblessness are further depressing homebuyer appetite. At the same time, supply is on the rise with insurance and property taxes putting financial pressure on stretched homeowners.”
The macroeconomic background is also evolving. The Federal Reserve dropped rates earlier in December, and Chair Jerome Powell stated that the median contributor in the Fed’s Summary of Economic Projections anticipates the benchmark rate being set at 3.4% by the end of 2026.
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Our Methodology
For this list, we compiled a list of U.S.-listed REIT stocks with a forward P/E ratio of less than 15. In addition, we ranked these stocks based on the number of hedge funds invested in each of them as of Q3 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Orchid Island Capital, Inc. (NYSE:ORC)
Forward P/E Ratio: 7.07
Number of Hedge Fund Holders: 11
Orchid Island Capital, Inc. (NYSE:ORC) ranks among the most undervalued REIT stocks to buy right now. On December 15, Compass Point began coverage of Orchid Island Capital, Inc. (NYSE:ORC), rating it Neutral and setting a $7.50 price target on the stock. Compass Point said that political and policy concerns will come out as significant factors for mortgage asset performance in the following quarters, generating prospects for MBS investors.
Even with these favorable aspects, Compass Point was concerned that Orchid Island Capital’s substantial dividend payout compared to core ROE and GAAP earnings would keep stifling book value per share growth.
More recently, on January 14, Orchid Island Capital, Inc. (NYSE:ORC) announced its preliminary projections for the fourth quarter of 2025, forecasting a book value per share of $7.54 and a net income per share of $0.62, including $0.43 in realized and unrealized profit on residential mortgage-backed securities (RMBS) and derivatives.
Orchid Island Capital, Inc. (NYSE:ORC) is a specialty finance company that invests on a leveraged basis in Agency residential mortgage-backed securities.
9. Adamas Trust, Inc. (NASDAQ:ADAM)
Forward P/E Ratio: 9.74
Number of Hedge Fund Holders: 14
Adamas Trust, Inc. (NASDAQ:ADAM) ranks among the most undervalued REIT stocks to buy right now. On January 6, B. Riley started coverage of Adamas Trust, Inc. (NASDAQ:ADAM) with a Buy rating and a $9 price target. The firm emphasized Adamas Trust’s portfolio composition adjustment to 63% Agency RMBS, implying that the growing percentage of agency RMBS assets should demand a higher multiple and premium above the peer group.
B. Riley issued forward adjusted EPS expectations of $0.90 for FY25, $1.00 for FY26, and $1.15 for FY27, noting overall expansion in the opening three quarters of 2025 and higher mortgage acquisitions and lending.
B. Riley expressed optimism that Adamas Trust, Inc. (NASDAQ:ADAM) shares will trade closer to GAAP book value as Constructive’s origination volumes increase, the overall exposure to agency RMBS remains unchanged, while the quarterly dividend of $0.23 appears covered.
Adamas Trust, Inc. (NASDAQ:ADAM) is an internally managed REIT for federal income tax purposes in the United States. Its primary activity is to acquire, invest in, finance, and manage mortgage-related single-family and multi-family residential assets.
8. Invesco Mortgage Capital Inc. (NYSE:IVR)
Forward P/E Ratio: 4.07
Number of Hedge Fund Holders: 15
Invesco Mortgage Capital Inc. (NYSE:IVR) ranks among the most undervalued REIT stocks to buy right now. On January 16, Compass Point lifted its price target for Invesco Mortgage Capital Inc. (NYSE:IVR) to $9.50 from $9, retaining a Buy rating on the mortgage REIT. The firm identified wider-than-average mortgage spreads as a possible driver of book value per share increase. Compass Point forecasts these margins to narrow as fixed-income fluctuation falls and the yield curve grows steeper.
The firm also mentioned Invesco Mortgage Capital’s announcement of its first $0.12 monthly dividend for January 2026, which retains a comparable run rate as its prior $0.36 quarterly dividend from Q4 2025.
Invesco Mortgage Capital Inc. (NYSE:IVR) revealed preliminary financial indicators suggesting an expected book value per share that ranges from $8.94 to $9.30 as of January 12, 2026, which puts the midpoint of $9.12 somewhat lower than Compass Point’s forecast of $9.24.
Invesco Mortgage Capital Inc. (NYSE:IVR) is a Georgia-based real estate investment trust that engages in investing, financing, and managing mortgage-backed securities and such other assets.
7. Forestar Group Inc. (NYSE:FOR)
Forward P/E Ratio: 7.42
Number of Hedge Fund Holders: 15
Forestar Group Inc. (NYSE:FOR) ranks among the most undervalued REIT stocks to buy right now. Following Forestar Group Inc. (NYSE:FOR)’s fiscal first quarter 2026 results, Citizens reaffirmed its Market Outperform rating and $35 price target on the company’s shares on January 21. Forestar Group Inc. (NYSE:FOR) reported $273 million in revenue, which was 2.83% higher than the expected $265.48 million. Meanwhile, the company’s earnings per share of $0.30 came in lower than both Citizens’ projection of $0.34 and the average forecast of $0.32. The earnings miss was mostly attributed to a 17% year-over-year drop in lots sold.
Forestar Group Inc. (NYSE:FOR) somewhat countered the lower volume by raising its average selling price, which was accomplished by marketing larger lots that had more exposure to Western markets. Citizens observed that the weaker-than-expected performance reflected persistent affordability issues in the entry-level real estate market, where house prices continue to be high in comparison to mortgage rates.
Forestar Group Inc. (NYSE:FOR) is one of the largest residential community developers in the United States which primarily acquires entitled real estate and develops it into finished residential lots for sale to homebuilders.
6. Franklin BSP Realty Trust, Inc. (NYSE:FBRT)
Forward P/E Ratio: 7.54
Number of Hedge Fund Holders: 16
Franklin BSP Realty Trust, Inc. (NYSE:FBRT) ranks among the most undervalued REIT stocks to buy right now. Following Franklin BSP Realty Trust, Inc. (NYSE:FBRT)’s third-quarter 2025 results, Citizens reaffirmed its Market Outperform rating and $13.50 price target on the company’s shares. The firm underlined Franklin BSP’s strong credit performance, which allows the company to utilize capital aggressively as it moves through 2026.
Franklin BSP Realty Trust, Inc. (NYSE:FBRT) reported revenues of $90.12 million, a 66% increase year-over-year. This print outperformed analysts’ forecasts by 10.7%. Despite the revenue beat, the company had a sluggish quarter, falling significantly short of analysts’ net interest income and EPS projections.
More positively, Citizens cited the NewPoint acquisition as an important bonus, noting that it comprises GSE licenses and a servicing portfolio with reliable revenue streams. Speaking on the acquisition, Michael Comparato, President of Franklin BSP Realty Trust, Inc. (NYSE:FBRT), said the following:
“The third quarter was a transitional period for FBRT, highlighted by the successful $425 million acquisition of NewPoint. Integration is progressing very well, and we’ve made meaningful progress on the three-pronged plan to grow distributable earnings.”
Franklin BSP Realty Trust, Inc. (NYSE:FBRT) originates, acquires, and manages a diversified portfolio of commercial real estate debt primarily first mortgage loans.
5. BrightSpire Capital, Inc. (NYSE:BRSP)
Forward P/E Ratio: 8.55
Number of Hedge Fund Holders: 17
BrightSpire Capital, Inc. (NYSE:BRSP) ranks among the most undervalued REIT stocks to buy right now. On January 5, B.Riley began coverage of BrightSpire Capital, Inc. (NYSE:BRSP) with a Buy rating and a $7.50 price target. According to analyst Timothy D’Agostino, the company’s shares currently trade at about 80% of their GAAP book value, a price premium that he projects to decrease in 2026.
The firm’s upbeat forecast is based on the BrightSpire’s solid liquidity position, which includes $280 million in cash and $1.1 billion in master repurchase capabilities. According to B.Riley, this should support higher loan origination activities in 2026.
B.Riley also noted that BrightSpire’s credit quality has improved year-to-date, with the watch list down to five loans worth $182 million as of September 30, as opposed to seven loans making up $411 million at the end of 2024.
BrightSpire Capital, Inc. (NYSE:BRSP) is a commercial real estate credit REIT that focuses on originating, acquiring, financing, and managing a diversified portfolio of CRE debt investments and net-leased real estate investments.
4. ARMOUR Residential REIT, Inc. (NYSE:ARR)
Forward P/E Ratio: 5.74
Number of Hedge Fund Holders: 19
ARMOUR Residential REIT, Inc. (NYSE:ARR) ranks among the most undervalued REIT stocks to buy right now. On January 16, Jones Trading raised ARMOUR Residential REIT, Inc. (NYSE:ARR) from Hold to Buy, with a $20.50 price target. The upward revision was based on a predicted growth in book value, which Jones Trading believes suggests that the shares are discounted when compared to agency rivals.
The firm expects that ARMOUR’s book value will reach $19.50 per share by January 15, a rise from $17.49 on September 30. Jones Trading believes the stock is trading at 0.97x projected book value per share, which puts it near the low end of the agency mortgage REIT peer standard.
Similarly, Compass Point began coverage of ARMOUR Residential REIT, Inc. (NYSE:ARR) with a Buy rating in mid-December, pointing to wider-than-average mortgage spreads as a key driver of potential book value per share expansion, and expects these spreads to narrow as fixed income volatility falls and the yield curve becomes steeper.
ARMOUR Residential REIT, Inc. (NYSE:ARR) is a Maryland-based company founded in 2008. It invests primarily in residential mortgage-backed securities issued or guaranteed by US government-sponsored entities.
3. Annaly Capital Management, Inc. (NYSE:NLY)
Forward P/E Ratio: 8.15
Number of Hedge Fund Holders: 23
Annaly Capital Management, Inc. (NYSE:NLY) ranks among the most undervalued REIT stocks to buy right now. On January 6, BTIG raised Annaly Capital Management, Inc. (NYSE:NLY) from Neutral to Buy, setting a $25 price target on the company’s shares. The firm indicated possible dividend support in today’s low-interest-rate, volatile environment, especially if expectations for additional Fed rate cuts this year remain high.
The firm expects Annaly Capital Management, Inc. (NYSE:NLY) to exhibit additional upside if mortgage-backed securities spreads compared to Treasuries, which are now approaching multi-year lows of roughly 115 basis points, narrow. In addition, the firm pointed to a more stable stock valuation if spreads expand again amid rising interest rate volatility.
Moreover, BTIG noted a drop in long-term interest rates, which could increase prepayment vulnerability in NLY’s MSR and non-QM portfolios, though the firm’s assessment also included some expectation that the Trump presidency will attempt to engineer lower mortgage rates.
Annaly Capital Management, Inc. (NYSE:NLY) is a diversified capital manager that engages in the mortgage finance business. The firm’s portfolio includes securities, loans, and equity in the mortgage finance market.
2. AGNC Investment Corp. (NASDAQ:AGNC)
Forward P/E Ratio: 8.01
Number of Hedge Fund Holders: 29
AGNC Investment Corp. (NASDAQ:AGNC) ranks among the most undervalued REIT stocks to buy right now. Piper Sandler raised its price target for AGNC Investment Corp. (NASDAQ:AGNC) to $11 from $11 on January 15, while keeping an Overweight rating on the company’s stock. The boost reflects narrowing agency MBS spreads, which Piper Sandler believes will benefit AGNC’s forward tangible book values.
Moreover, earlier in January, AGNC Investment Corp. (NASDAQ:AGNC) announced a number of financial and structural updates. The company declared a cash dividend of $0.12 per share for January 2026 and reinstated economist Dr. Morris Davis as an independent director on the Compensation and Corporate Governance Committee.
According to the company, the economist’s return, following his earlier tenure as Chief Housing Economist on the Council of Economic Advisors, brings specialist housing and macroeconomic policy expertise directly into AGNC’s administration structure.
AGNC Investment Corp. (NASDAQ:AGNC) operates a real estate investment trust, investing in residential mortgage pass-through securities and collateralized mortgage obligations. The company is also involved in investments in other types of mortgage and mortgage-related securities, including credit risk transfer securities and non-Agency residential and commercial mortgage-backed securities.
1. Rithm Capital Corporation (NYSE:RITM)
Forward P/E Ratio: 5.27
Number of Hedge Fund Holders: 37
Rithm Capital Corporation (NYSE:RITM) ranks among the most undervalued REIT stocks to buy right now. On January 8, UBS began coverage of Rithm Capital Corporation (NYSE:RITM), with a Buy rating and a $16 price target, noting the company’s acquisition of Paramount Group. The recent purchases of Paramount Group and Crestline, according to the firm, promote Rithm Capital’s goal of increasing assets under management and improving the potential for earnings in its asset management division. Specifically, Rithm Capital Corporation (NYSE:RITM) now manages roughly $102 billion in investable assets as a result of the Crestline acquisition.
According to UBS, additional information about the amount of third-party cash secured in connection with the Paramount Group acquisition might boost investor trust in the company’s overall strategy.
The firm also mentioned the potential long-term increase in return on equity and value multiples should Rithm Capital Corporation (NYSE:RITM) successfully move towards an asset management strategy.
Rithm Capital Corporation (NYSE:RITM) operates as an alternative asset manager with a focus on real estate and related services. The business is spread out across four distinct segments, i.e., origination & servicing, investment portfolio, residential transitional lending, and asset management.
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