New Jersey, known as The Garden State, offers more than just picturesque landscapes and bustling cities. It’s also a hub for savvy investors seeking growth and stability. The real estate market here presents unique opportunities, particularly through Real Estate Investment Trusts (REITs). In this article, we will explore some New Jersey REITs that offer investors a blend of profitability and security.
Key Takeaways – Best New Jersey REITs Chart
| REIT | Market Cap | Dividend Yield (TTM) | Industry |
|---|---|---|---|
|
$3.85 Billion |
4.43% |
Diversified |
|
|
$1.12 Billion |
8.06% |
Retail |
|
|
$992.65 Million |
5.38% |
Residential |
Essential Properties Realty Trust, Inc. (EPRT)
- Market Capitalization: $3.85 Billion
- Dividend Yield (TTM): 4.43%
- Industry: REIT – Diversified
- Headquarters: Princeton, New Jersey
Essential Properties Realty Trust, Inc. (EPRT) is a distinctive player in the REIT sector. As of the third quarter in 2023, its portfolio comprised 1,793 commercial properties across 48 states, covering 17.8 million square feet.
A key element of EPRT’s strategy is its focus on properties that are crucial to the tenants’ operations. This focus ensures that their properties remain a necessary part of the tenant’s business, providing stability to the income stream. EPRT’s portfolio is characterized by high occupancy rates and long lease terms. As of the third quarter in 2023, their portfolio was almost fully leased (99.8%) with a weighted average lease term of approximately 14 years, reflecting their commitment to long-term, stable revenue streams.
EPRT’s growth strategy also includes a robust investment platform where a significant portion of its deals are sourced through existing relationships and are predominantly sale-leaseback transactions. It allows EPRT to build a portfolio with tenants with the operational expertise to manage their businesses successfully. Their diversified tenant base includes sectors like restaurants, car washes, convenience stores, early childhood education, auto services, and medical services.
Furthermore, EPRT’s investment strategy is distinguished by its focus on acquiring additional properties that can help increase its rental income and expand profit margins. The company is positioned to address the increasing demand for retail space, especially as it expands its portfolio.
Alexander’s, Inc. (ALX)
- Market Capitalization: $1.12 Billion
- Dividend Yield (TTM): 8.06%
- Industry: REIT – Retail
- Headquarters: Paramus, New Jersey
Alexander’s, Inc. (ALX), a REIT in New Jersey, manages a small portfolio with properties primarily in New York City. Despite its focused portfolio, ALX has some unique features worth discussing.
One key aspect of Alexander’s Inc.’s strategy is its concentrated portfolio. Unlike many REITs that diversify across numerous properties, Alexander’s maintains a small, focused set of properties. It means a deep investment in each property’s potential and performance.
The company’s strategy also includes significant investment in redevelopment and renovation. By upgrading and enhancing properties, Alexander’s aims to increase their value and attract high-quality tenants.
ALX’s dividend yield is attractive, and its Price/FFO ratio is almost double that of the Office REIT average. However, another significant factor in ALX’s revenue is its dependence on a few tenants. Over half of its rental income comes from a single tenant, Bloomberg. This concentration poses a risk; any significant change in Bloomberg’s operations could substantially impact ALX’s revenue.
UMH Properties, Inc. (UMH)
- Market Capitalization: $992.65 Million
- Dividend Yield (TTM): 5.38%
- Industry: REIT – Residential
- Headquarters: Freehold, New Jersey
UMH Properties, Inc. (UMH) is a REIT known for owning and operating manufactured home communities. Founded in 1968, UMH has a long-standing history in the real estate sector. Originally named United Mobile Homes, Inc., the company rebranded to UMH Properties, Inc. in 2006.
UMH’s portfolio mainly consists of manufactured home communities. These communities are leased to a broad range of tenants, focusing on providing affordable housing options. The company’s acquisition strategy has been aggressive, consistently adding new communities to its portfolio, which has expanded its reach across multiple states.
From 2013 to 2023, UMH acquired numerous communities across various states, including Tennessee, Pennsylvania, Ohio, Indiana, Maryland, Michigan, Alabama, South Carolina, New York, Florida, and Georgia.
However, you may need to notice that UMH’s portfolio is not as diversified as some investors might prefer. The company’s focus on manufactured homes presents specific risks related to changes in population dynamics, unemployment rates, and rent prices.
