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Illinois REITs: The Best Market Movers in The Prairie State

Real Estate Investment Trusts (REITs) in Illinois represent a remarkable segment of the state’s economy, characterized by their resilience and potential for growth. Situated in a region known for its diverse real estate landscape, these REITs encompass a range of properties, from dynamic urban spaces to expanding suburban areas. In this article, we will delve into some of the top Illinois REITs, shedding light on their significance.

Best Illinois REITs - Featured Image

Key Takeaways – Best Illinois REITs Chart

REIT Market Cap Dividend Yield (TTM) Industry
$23.46 Billion
$19.28 Billion
Healthcare Facilities
$13.01 Billion
$6.98 Billion
$2.07 Billion
$1.71 Billion

Equity Residential (EQR)

  • Market Capitalization: $23.46 Billion
  • Dividend Yield (TTM): 4.23%
  • Industry: REIT – Residential
  • Headquarters: Chicago, Illinois

Equity Residential (EQR), headquartered in Chicago, Illinois, was established with an IPO date on August 11, 1993. It operates under the guidance of key executives, including Samuel Zell as the Founder and Chairman, and Mark J. Parrell as the President and CEO.

It primarily focuses on acquiring, developing, and managing residential properties.

EQR’s portfolio comprises 305 properties with approximately 80,683 apartment units. The company strategically focuses on urban and high-density suburban coastal gateway markets, targeting areas that appeal to affluent long-term renters. These markets include Boston, New York, Washington, D.C., Seattle, San Francisco, and Southern California, with expanding operations in Denver, Atlanta, Dallas/Ft. Worth, and Austin.

The company has shown a varied performance over recent years, with a 1-year return of approximately 9.79%, but a more modest long-term return over the past decade.

Investors and analysts have varied views on EQR’s future performance. Some see potential for strong yields and growth, especially considering recent changes in eviction moratoriums in key markets like Los Angeles. These changes could positively impact EQR’s ability to generate rents. However, opinions differ, and the overall outlook for EQR requires careful consideration of its coastal market exposure and the quality of its developments.

Ventas, Inc. (VTR)

  • Market Capitalization: $19.28 Billion
  • Dividend Yield (TTM): 3.70%
  • Industry: REIT – Healthcare Facilities
  • Headquarters: Chicago, Illinois

Ventas Inc. (VTR) is an S&P 500 company. Founded on May 4, 1998, and headquartered in Chicago, Illinois, Ventas has developed a robust portfolio encompassing approximately 1,400 properties across the United States, Canada, and the United Kingdom.

Ventas specializes in senior housing communities, outpatient medical buildings, research centers, hospitals, and other healthcare facilities. This diverse portfolio is driven by demographic demand, particularly from the aging population. The company leverages its capital to enhance the value of these properties, reflecting its strategic intersection of healthcare and real estate.

The company’s long-term strategy, honed over 20 years, emphasizes diversification across property types, capital sources, and industry partnerships. Ventas is known for its financial strength, flexibility, consistent growth, and significant achievements in environmental, social, and governance (ESG) aspects.

Regarding financial performance, Ventas focuses on adjusted Funds From Operations (FFO). The company’s valuation tends to follow its historical average of 15x P/FFO, offering opportunities for both buying and rotating. As of fall 2022, Ventas had seen a valuation of around 12.5x P/FFO, and by early 2024, it was around 14.3x.

Despite the positive outlook, Ventas, like other REITs, faces challenges, particularly from inflation, wage increases, and the overall labor market. These factors could impact rent coverage and growth prospects.

Equity LifeStyle Properties, Inc. (ELS)

  • Market Capitalization: $13.01 Billion
  • Dividend Yield (TTM): 2.50%
  • Industry: REIT – Residential
  • Headquarters: Chicago, Illinois

Equity LifeStyle Properties, Inc. (ELS) is a significant player in the REIT sector, particularly in residential properties. As of October 16, 2023, ELS owns or has interests in 450 properties across 35 states and British Columbia, encompassing 171,707 sites.

ELS stands out for its approach to growth. The company’s expansion strategy has been mainly funded through capital recycling, judicious use of debt, retained cash, and low-cost in-house development, rather than equity issuance. This approach has allowed ELS to grow its asset portfolio steadily, albeit slower than some of its peers.

Moreover, ELS has been remarkable in its dividend growth, showcasing 17 consecutive years of dividend growth. It demonstrates the company’s commitment to returning value to its shareholders. Despite a lower starting dividend yield, ELS’s track record in dividend growth surpasses its peers, making it an attractive option for long-term investors focused on total returns and steady income growth.

First Industrial Realty Trust, Inc. (FR)

  • Market Capitalization: $6.98 Billion
  • Dividend Yield (TTM): 2.35%
  • Industry: REIT – Industrial
  • Headquarters: Chicago, Illinois

First Industrial Realty Trust, Inc. (FR), based in Chicago, Illinois, is a REIT specializing in logistics properties. Founded in 1993, it focuses exclusively on the U.S. market. As of September 30, 2023, First Industrial Realty Trust’s portfolio encompasses approximately 69.4 million square feet of industrial space, highlighting its significant role in the logistics and industrial sectors.

Strategic acquisitions and development mark the company’s history. In the mid-1990s, it expanded its portfolio significantly through UPREIT transactions, entering new markets and acquiring numerous properties. However, the late 1990s brought challenges, with a downturn in REIT stock prices affecting First Industrial Realty Trust’s acquisition capabilities.

Despite these challenges, the company adapted by focusing on top industrial markets, catering to the demands of the burgeoning e-commerce and supply chain management industries. This shift towards targeting the top 25 industrial real estate markets in the U.S. was a strategic move to capitalize on the rising demand from these sectors.

Now, the company has a well-defined strategy of investing in supply-constrained, coastally-oriented markets across 15 target Metropolitan Statistical Areas (MSAs). This strategic focus positions it advantageously within the industrial real estate market, catering to the needs of multinational corporations and regional firms integral to supply chains.

Equity Commonwealth (EQC)

  • Market Capitalization: $2.07 Billion
  • Dividend Yield (TTM): –
  • Industry: REIT – Office
  • Headquarters: Chicago, Illinois

Equity Commonwealth (EQC) is an Illinois-based REIT in the commercial real estate sector. It primarily focuses on commercial office properties across the United States. As of 2024, the REIT manages a portfolio of four properties, collectively covering approximately 1.5 million square feet.

Despite the challenges posed by the pandemic and the trend towards remote work, Equity Commonwealth’s stable office position and portfolio, backed by a strong balance sheet, suggest a cautious yet potentially rewarding opportunity for investors willing to engage with the office REIT sector at current valuations.

InvenTrust Properties Corp. (IVT)

  • Market Capitalization: $1.71 Billion
  • Dividend Yield (TTM): 3.35%
  • Industry: REIT – Retail
  • Headquarters: Downers Grove, Illinois

InvenTrust Properties Corp. (IVT) is a distinguished REIT specializing in multi-tenant essential retail properties. IVT has carved a niche in the Sun Belt region, focusing on grocery-anchored neighborhood and community centers, as well as high-quality power centers with grocery components.

Founded in 2005, InvenTrust has been committed to acquiring and managing retail properties in high-growth Sun Belt markets. Its major tenants include well-known names like Kroger, Costco, and Trader Joe’s. This strategic approach involves acquiring and opportunistically disposing of retail properties.

Furthermore, IVT strongly emphasizes maintaining a flexible capital structure and enhancing environmental, social, and governance (ESG) practices. It’s worth noting that InvenTrust has been a member of the Global Real Estate Sustainability Benchmark (GRESB) since 2013, underlining its dedication to ESG principles.

As for its financial performance, InvenTrust distributed a dividend per share of $0.2155 in the third quarter, marking a 5% increase compared to the previous year. This translates to a current dividend yield of 3.4%. Looking ahead, the company is expected to generate $1.39 in adjusted Funds From Operations (FFO) in 2024, implying a payout ratio of 62%, which is considered low. This suggests that InvenTrust has considerable room to increase its dividend in the coming years.

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