In this article, we will look at the Top 12 Beaten-Down REITs Ready for a Rotation Rally.
The bulls have been winning on Wall Street over the past two years, and this market has been powered by an artificial intelligence boom, according to a July 8 Bloomberg Intelligence podcast. However, Mandeep Singh, Global Head of Tech Research for Bloomberg Intelligence, told the podcast’s hosts, Paul Sweeney and Scarlet Fu, that the bull market is showing cracks. Singh noted that as of July 8, the semiconductor sector’s biggest names had collectively shed roughly $1 trillion in market value in less than two months. The largest chip stocks had declined as much as 16% from their May highs, Singh said.
Jessica Inskip, director of investor research at StockBrokers.com, views the slump as more of a rotation. Inskip told Yahoo Finance’s Opening Bid panel that what Wall Street is witnessing is not a correction but capital moving away from the most crowded corners of the market and into areas that have been left behind.
Incidentally, that rotation argument was also the key theme in a Neuberger Berman essay published on June 8. The firm’s senior portfolio manager, Eli Salzmann, and portfolio manager David Levine argued that a value cycle, which began gathering steam in late 2024, is now ready to resume after a brief pause. They pointed to heady growth valuations and extreme S&P 500 concentration, with the 10 largest stocks accounting for roughly 85% of the index’s year-to-date return.
Because of their structural characteristics, real estate investment trusts, or REITs, are generally classified as value stocks. This makes them natural candidates in a rotation of this kind. Interestingly, data shows that a REIT rebound is already underway. According to MSCI’s June 30 factsheet, the MSCI US REIT Index returned 17.58% year-to-date through the end of June, nearly double the S&P 500’s 8.97% gain over the same period.
Against this backdrop, this article identifies 12 beaten-down REITs that appear well positioned to benefit as the rotation continues.
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Our Methodology
To compile this list of the Top 12 Beaten-Down REITs Ready for a Rotation Rally, we used Yahoo and Finviz screeners to scan for the top REITs listed in the US. We then trimmed the selection by focusing on beaten down REITs, which we defined as REITs that were down by more than 5% for the year and trading 0-10% above their 52 week lows, as of July 10, 2026. We also considered institutional interest in the REITs using the number of hedge funds holding stakes in them, based on Q1 2026 13F filings in Insider Monkey’s database, and ensured that their analyst upside is at least 10%. The list is presented in ascending order of the number of hedge funds that hold stakes in the REITs.
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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
Top Beaten-Down REITs Ready for a Rotation Rally
12. Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI)
Number of Hedge Fund Holders: 6
Year-To-Date Performance: -12.81%
Stock Upside: 49.67%
Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) is one of the top beaten-down REITs ready for a rotation rally. On June 18, Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) and Chicago Atlantic BDC, Inc. (NASDAQ:LIEN) jointly announced they had signed a definitive merger agreement. The agreement allows Chicago Atlantic Real Estate Finance to elect to be regulated as a business development company and merge into Chicago Atlantic BDC. This will be an all-stock combination.
The statement detailed that once the deal closes, Chicago Atlantic BDC will remain the surviving public entity. This entity will continue trading on the Nasdaq Global Select Market as LIEN, while REFI ceases to exist. The boards of the two companies unanimously approved the agreement, which the press release said they acted on recommendations from special committees made up solely of independent directors from each side.
Under the exchange structure, Chicago Atlantic Real Estate Finance shareholders will receive Chicago Atlantic BDC shares based on the ratio of each company’s adjusted net asset value, or NAV, per share. Using net asset values as of March 31, former Chicago Atlantic Real Estate Finance shareholders would end up owning approximately 50.5 percent of the combined company, though the final split depends on updated NAV figures closer to closing.
The combined entity would carry a pro-forma NAV of $613 million and a pro-forma investment portfolio of $771 million. This is based on both companies’ Q1 2026 financial statements.
Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) is a commercial mortgage real estate investment trust. It originates, structures, and invests in first mortgage loans and alternative structured financings secured by commercial real estate properties in the United States.
11. Centerspace (NYSE:CSR)
Number of Hedge Fund Holders: 14
Year-To-Date Performance: -17.30%
Stock Upside: 24.14%
Centerspace (NYSE:CSR) is one of the top beaten-down REITs ready for a rotation rally. On June 16, BTIG analyst Michael Gorman downgraded Centerspace (NYSE:CSR) to Neutral from Buy and withdrew the firm’s $79 price target.
The analyst updated the rating and target price after Centerspace concluded a strategic review of its business. Gorman noted that the review process was months-long but couldn’t help the company secure a sale. In his view, this result raises fresh doubts among investors about how the market is currently valuing the REIT’s apartment portfolio. Because the review did not lead to a company sale, Centerspace will not need to file a proxy statement related to the process, Gorman noted. He added that this outcome removed one potential near-term catalyst that investors had been watching for.
On why the firm withdrew the $79 price target, Gorman explained that BTIG does not attach price targets to stocks it rates Neutral.
Alongside the rating change, BTIG also trimmed its earnings forecasts for Centerspace, where it cut its 2026 per-share estimate to $4.70 from $4.89. The new estimate for 2027 is down to $4.62 from $5.08.
Centerspace shared the outcome of the strategic review in question on June 1. As part of the review, the company said that its board of trustees had approved a portfolio optimization and deleveraging plan.
The plan calls for selling twelve apartment communities, including a complete exit from the Bismarck and Rapid City markets in the Dakotas along with one property in Denver. All of these properties are already under contract with buyers. The company expects these sales to close in the second half of the year, though it cautioned that the deals remain subject to conditions in the purchase agreements and could face delays or fail to close entirely.
Centerspace (NYSE:CSR) is a real estate investment trust. It provides residential rental housing in the Midwest and Mountain West regions of the United States.
