In this article, we will take a look at some of the best undervalued REIT stocks.

Real estate stocks experienced a strong start to 2025, with the MSCI US REIT Index posting a 1.1% gain in March, in contrast to declines of 1.6% and 5.2% in the S&P 500 and Russell 2000, respectively. Anthony Paolone, Co-Head of US Real Estate Stock Research at JPMorgan, noted that in the event of a significant economic slowdown, REIT earnings are likely to exhibit greater resilience relative to broader market sectors, historically declining less sharply and at a slower pace than S&P 500 earnings.

JPMorgan Research estimates a 3% year-over-year increase in bottom-line funds from operations (FFO) for REITs in 2025, consistent with growth observed in 2024, with a further increase to nearly 6% anticipated in 2026. According to Anthony Paolone, this improvement is expected to come from a boost in investment activity as transaction volumes recover, creating new avenues for REIT-led expansion.

Although growth trajectories are likely to differ across asset classes, JPMorgan forecasts that a combination of approximately 4% dividend yields, low-to-mid single-digit FFO growth, and potential valuation multiple expansion could yield a total return in the vicinity of 10%.

Commercial real estate fundamentals are expected to remain resilient, with same-store net operating income growth for REITs projected at approximately 3% in 2025, consistent with the rate observed in 2024. This organic performance is expected to be led by an increasingly favorable investment environment. Additionally, external growth is forecasted to gain momentum in 2025 and 2026, driven by improving capital markets liquidity and a gradual recovery in commercial real estate transaction volume.

With that in mind, let’s take a look at the 10 most undervalued REIT stocks that are also on Wall Street’s radar.

Our Methodology 

We used the Finviz stock screener to filter REIT stocks based on P/E ratios. Then, we shortlisted stocks with price-to-earnings (P/E) ratios below the sector average of 44. The 10 chosen stocks were some of the most undervalued REITs that also received coverage from Wall Street analysts and mainstream media outlets recently. These momentum stocks were favored by top hedge funds in the first quarter of 2025, as per Insider Monkey’s Q1 2025 database.

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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

10. Omega Healthcare Investors, Inc. (NYSE:OHI)

Number of Hedge Fund Holders: 21

P/E Ratio as of June 19: 22.97

Omega Healthcare Investors, Inc. (NYSE:OHI) is one of the most undervalued stocks. On June 9, Citizens JMP maintained a Market Perform rating on Omega Healthcare. The decision reflects improving fundamentals, including expanding coverage ratios and more favorable Medicaid trends in priority regions.

Omega Healthcare is benefitting from favorable momentum, analysts observed, citing a senior housing operator’s improving operational performance. In light of positive developments, analysts still point to unresolved issues tied to PACS Group, Omega Healthcare’s fifth-largest operator. The group is facing scrutiny over potential billing violations, which could pose risks for the company. Analysts believe the matter may take years to resolve, though rent flows are likely to continue in the interim.

According to analysts, the issues surrounding PACS Group may encourage Omega Healthcare Investors, Inc. (NYSE:OHI) to adopt a strategic acquisition plan focused on accelerating FFO growth and minimizing exposure to the troubled operator, thereby reducing overall risk.

Omega Healthcare is a real estate investment trust that supports the long-term healthcare sector by funding skilled nursing and assisted living facilities in the United States and the United Kingdom.

9. COPT Defense Properties (NYSE:CDP)

Number of Hedge Fund Holders: 22

P/E Ratio as of June 19: 22.89

COPT Defense Properties (NYSE:CDP) is one of the most undervalued stocks. On June 10, Truist maintained a Hold rating on CDP and raised the price target from $29 to $30. With a robust 4.31% yield, the company has consistently paid dividends for the past 34 years, indicating its commitment to shareholder returns. The target price update reflects a refined valuation approach that involves discounted cash flow analysis along with forecasted net asset value.

Analysts reported that COPT Defense Properties (NYSE:CDP) is advancing three developments set to launch in 2025, with more projects on deck for 2026 and 2027. The $308 million active portfolio is 62% pre-leased, with 30% of the costs already invested.

Occupancy at COPT Defense is forecasted to dip slightly to 91.9% by the end of 2025, compared to 92.3% in the first quarter. The firm also projects a low single-digit positive increase in GAAP rental spreads.

Analysts indicate that COPT Defense Properties (NYSE:CDP) is unlikely to engage in any mergers, acquisitions, or property disposals in 2025. However, they are factoring in a $400 million unsecured note issuance for the fourth quarter.

COPT Defense, a self-managed REIT, focuses on the ownership, operation, and development of mission-critical real estate assets located near or within major US Government defense installations.