In this article, we will list the Top 5 Beaten-Down REITs Ready for a Rotation Rally. Please visit Top 12 Beaten-Down REITs Ready for a Rotation Rally if you would like to see the extended list and the methodology behind it.
5. Starwood Property Trust, Inc. (NYSE:STWD)
Number of Hedge Fund Holders: 28
Year-To-Date Performance: -8.66%
Stock Upside: 21.58%
Starwood Property Trust, Inc. (NYSE:STWD) is one of the top beaten-down REITs ready for a rotation rally. On June 16, Starwood Property Trust, Inc. (NYSE:STWD) announced that its board of directors had declared a dividend of $0.48 per share of common stock. The payment covers the second quarter, which is the period ending June 30, 2026, and will be distributed on July 15 to stockholders of record as of the last day of June.
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The $0.48 payment means the payout is unchanged from the prior quarter, and it marks more than ten consecutive years in which Starwood has held its dividend steady at this level. As of this writing, the payout equates to an annualized yield of roughly 11.4 percent, which is one of the higher yields among commercial mortgage REITs.
Starwood’s management proposed the dividend payment when releasing the Q1 FY2026 earnings on May 8. Management said during the earnings call that the $0.48 per share payout is sustainable and will eventually be fully covered by recurring distributable earnings (DE), even though Q1 FY2026 DE of $0.39 per share fell short of that target.
CFO Rina Paniry explained that the quarter’s reported DE was depressed by elevated cash balances (cash drag), the dilutive ramp-up of the newly acquired net lease platform, and costs tied to resolving non-performing assets. She noted that adjusting for these one-time drags, the DE would have been closer to $0.47 per share; just shy of the $0.48 dividend.
Starwood Property Trust, Inc. (NYSE:STWD) is a real estate investment trust. It originates, acquires, finances, and manages commercial first mortgages, non-agency residential mortgages, mezzanine loans, preferred equity, and commercial mortgage-backed securities. The company also originates and manages infrastructure debt investments, acquires and manages equity interests in stabilized commercial real estate properties, and manages problem assets, acquires CMBS, and originates conduit loans for securitization.
4. Rithm Capital Corp. (NYSE:RITM)
Number of Hedge Fund Holders: 31
Year-To-Date Performance: -15.50%
Stock Upside: 41.15%
Rithm Capital Corp. (NYSE:RITM) is one of the top beaten-down REITs ready for a rotation rally. On July 2, Piper Sandler lowered its price target on Rithm Capital Corp. (NYSE:RITM) to $12.50 from $14, while maintaining an Overweight rating.
The firm argued that the mortgage lending environment has stayed difficult heading into the third quarter. For that reason, the analysts favor agency-focused mortgage companies over originators like Rithm Capital. A key factor the firm used to support its position is that 30-year mortgage rates have remained stuck around 6.50%. In the analysts’ view, this level is so high that it is weighing on loan origination activity and, consequently, squeezing profitability for companies that depend on new mortgage volume.
Because of these persistently high rates, Piper Sandler does not expect much positive news from origination-focused management teams, including Rithm Capital’s, when they report the next quarterly results. The firm noted this is the main reason it trimmed its target even while staying bullish on the stock overall.
Separately, on June 22, Rithm Capital’s board of directors declared Q2 FY2026 dividends covering both its common stock and six series of preferred stock.
The common stock dividend of $0.25 per share is payable July 31, to shareholders of record as of July 2. This rate has held unchanged for eight consecutive quarters since 2024. The payouts for Series A, B, C, D, E, and F preferred shares range from $0.4375 to $0.6207 per share depending on the series, and are payable August 17.
Rithm Capital Corp. (NYSE:RITM) is an asset manager operating as a REIT. The company focuses on real estate, credit, and financial services, and operates through Origination and Servicing, Investment Portfolio, Residential Transitional Lending, and Asset Management segments. Its REIT structure provides tax efficiency through distribution of at least 90% of taxable income to stockholders.
3. Rexford Industrial Realty, Inc. (NYSE:REXR)
Number of Hedge Fund Holders: 39
Year-To-Date Performance: -12.11%
Stock Upside: 17.54%
Rexford Industrial Realty, Inc. (NYSE:REXR) is one of the top beaten-down REITs ready for a rotation rally. On June 18, Scotiabank analyst Greg McGinniss upgraded Rexford Industrial Realty, Inc. (NYSE:REXR) to Outperform from Sector Perform, while trimming the price target to $36 from $38.
On why he upgraded the rating but cut the target price, McGinniss explained that his firm believes the stock’s valuation has now caught up with the company’s challenging funds from operations growth story tied to the Southern California industrial market. In other words, much of the bad news is already reflected in the share price. Put simply, Scotiabank’s reasoning is that most of the downside risk in Rexford’s stock has already played out, and that this leaves the firm more comfortable turning positive even without raising its price target.
The analyst also pointed to Rexford’s own efforts to close the gap between its public market valuation and the value of its properties in private markets. He noted that the company has been buying back its own shares as a way to address that mismatch. McGinniss views these buybacks as a signal that Rexford management sees its stock as undervalued relative to its real estate holdings, and he suggested this could mark the beginning of a stabilization phase for the shares.
Rexford Industrial Realty, Inc. (NYSE:REXR) is a real estate investment trust. It invests in, operates, and repositions industrial properties throughout Southern California, the world’s fourth largest industrial market.
2. Crown Castle Inc. (NYSE:CCI)
Number of Hedge Fund Holders: 52
Year-To-Date Performance: -13.72%
Stock Upside: 27.15%
Crown Castle Inc. (NYSE:CCI) is one of the top beaten-down REITs ready for a rotation rally. On June 26, Goldman Sachs analyst Michael Ng assumed coverage of Crown Castle Inc. (NYSE:CCI) with a Neutral rating and a $95 price target.
Ng’s note described Crown Castle as “the largest pure-play US tower operator,” a position the company has moved into after divesting its fiber and small cell business. Despite that scale advantage, the analyst flagged near-term pressure from lost revenue tied to EchoStar and DISH, alongside slower carrier leasing activity. These are headwinds likely to weigh on Crown Castle’s earnings results in the coming quarters, Ng stated.
Nonetheless, the analyst pointed out that the concerns are balanced by several longer-term supports for the stock, including rising mobile data demand, upcoming spectrum deployments by carriers, and ongoing cost-cutting initiatives at the company. The note also highlighted potential valuation upside tied to Crown Castle’s now lower-risk, US-only business profile, along with expectations for improving adjusted funds from operations, or AFFO, per share growth as current headwinds fade.
This assumption of coverage continues a pattern of caution from Goldman Sachs on the stock, which had already lowered its price target twice earlier in the year. For instance, the firm cut the target from $117 to $105 in January.
Crown Castle Inc. (NYSE:CCI) is a real estate investment trust. It owns, operates, and leases approximately 40,000 cell towers and approximately 90,000 route miles of fiber supporting small cells and fiber solutions across every major US market.
1. American Tower Corporation (NYSE:AMT)
Number of Hedge Fund Holders: 69
Year-To-Date Performance: -6.02%
Stock Upside: 27.27%
American Tower Corporation (NYSE:AMT) is one of the top beaten-down REITs ready for a rotation rally. On June 26, Goldman Sachs assumed coverage of American Tower Corporation (NYSE:AMT) with a Buy rating and a $215 price target.
Goldman called American Tower the leading global operator of tower assets. The firm based that view on American Tower’s balanced portfolio spread across the US, Europe, and emerging markets, plus its fast-growing data center business, CoreSite. Also, the analysts expect American Tower to post the steadiest growth among the tower operators Goldman covers. This is largely because geographic and business diversification helps smooth out swings from any single market.
According to Goldman, a key part of the bullish case ties back to the resolution of the EchoStar contract dispute, through which American Tower removed roughly 2% of its consolidated property revenue and about 4% of its US and Canada property revenue from its 2026 outlook. This effectively cleared away a major uncertainty that had been hanging over the stock, the firm stated.
With that overhang resolved, Goldman believes American Tower is well positioned to deliver mid-to-high-single-digit AFFO per share growth over the medium term. The growth will be supported by steady domestic leasing activity, faster-growing international operations, and an accelerating data center segment.
American Tower Corporation (NYSE:AMT) is a real estate investment trust. It is an independent owner, operator, and developer of multitenant communications real estate with a portfolio of over 149,000 communications sites and a highly interconnected footprint of US data center facilities.
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