In this article, we will look at the Top 10 Undervalued REIT Stocks to Buy Now.
Real estate investment trusts (REITs) are making a comeback and outperforming the broader market. The Morningstar US Real Estate Index is up about 8% for the year. This outpaces the S&P 500, which is up about 4% over the same period.
The strong performance stems from renewed interest in real estate investment opportunities driven by the high income yields on offer. Signs that the US Federal Reserve could pause further interest rate hikes amid inflation concerns stemming from skyrocketing energy prices are also working in favor of real estate investments.
Real estate investment trusts also benefit from gains in the data center and Healthcare sectors. However, office REITs are under pressure due to remote work. Retail segments are also affected by the heightened focus on e-commerce.
Data from CoStar shows that investments in non-traded REITs have experienced significant gains as more capital flows out of private credit.
“We’re starting to see signs. Fundraising for real estate is starting to increase. It’s slower, but beginning to rise. Redemptions on the real estate side have subsided. There is now a rotation of capital,” said Kevin Gannon, chairman and CEO of Stanger.
Hard assets like real estate are increasingly offering a compelling way to diversify investment portfolios, and counter heightened volatility in the stock market due to economic pressure from tariffs and the Iran war. According to Blackstone, data centers, industrials, and multifamily REITs are among the segments well poised to benefit amid the uncertainties.
“Blackstone saw its first positive BREIT fund flows in February in four years. Private credit funds far exceed CRE debt funds—trillions versus billions—so shifts from private credit could significantly impact CRE funds.”
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Our Methodology
To compile a list of the Top Undervalued REIT Stocks to Buy Now, we used the Finviz screener to screen for the Top-listed US REITs. We trimmed the list by focusing on REITs with a forward P/E ratio of less than 15 and a positive upside potential as of April 29. Next, we focused on the stocks favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2025 database. Finally, we ranked the stocks in ascending order based on their upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Top Undervalued REIT Stocks to Buy Now
10. Annaly Capital Management, Inc. (NYSE:NLY)
Stock Upside Potential: 5.56%
Forward P/E: 7.09
Number of Hedge Fund Holders: 30
Annaly Capital Management (NYSE:NLY) is one of the top undervalued REIT stocks to buy now. On April 24, BofA Securities reiterated a Neutral rating on Annaly Capital Management (NYSE:NLY) and lowered the price target to $23 from $23.50.
According to the research firm, the risk-reward profile for the stock remains balanced, thus the neutral rating. In addition, it touted its solid core earnings per share of $0.76, up 3% quarter over quarter and above the forecast of $0.73. According to BofA, the better-than-expected earnings stemmed from stronger spread income and higher TBA dollar roll income, offset by lower fees and higher operating expenses.
Amid the earnings beat, revenue fell short of expectations at $452.69 million, compared with the $592.03 million expected. Annaly Capital Management boasts an impressive economic return of 1.5%, which is better than its peers. The company has also raised significant capital to support growth and maintain strong liquidity levels.
Annaly Capital Management, Inc. (NYSE:NLY) is a leading diversified capital manager and mortgage real estate investment trust (REIT) that primarily invests in and finances residential and commercial mortgage-backed securities (MBS). It generates income by leveraging capital to invest in agency-backed securities, residential loans, and servicing rights, with a focus on providing shareholder returns through dividends.
9. Arbor Realty Trust Inc. (NYSE:ABR)
Stock Upside Potential: 5.59%
Forward P/E: 14.38
Number of Hedge Fund Holders: 20
Arbor Realty Trust Inc. (NYSE:ABR) is one of the top undervalued REIT stocks to buy now. On April 2, Citizens reiterated a Market Outperform rating on Arbor Realty Trust Inc. (NYSE:ABR). However, it lowered its price target to $11 from $12.
The new price target reflects expected 2026 total dividends of $1.20, with the required yield adjusted to 10.9% from 10%. The stock currently yields 16%, and Citizens remains confident in the company’s ability to deliver a total return of 62%, including a cash yield of 16% and price appreciation of 46.5%.
The projections come amid confidence in the company’s multi-family origination and servicing business. Arbor Realty Trust remains focused on resolving non-performing loans. The company is also selling real estate-owned assets as it seeks to free up significant capital to redeploy in the core business. Effective management of non-performing assets was the catalyst for improvements in net interest margins.
Arbor Realty Trust Inc. (NYSE:ABR) is a real estate investment trust (REIT) and direct lender specializing in financing multifamily, single-family rental, and commercial real estate assets. As a major bridge lender, the company focuses on providing structured financial solutions, including bridge, permanent, mezzanine, and preferred equity financing.
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