In New York City, the land of dreams and endless potential, real estate is a pillar of financial growth and stability. Today, we will introduce some of the best New York REITs, exploring the most prestigious and high-performing opportunities in this dynamic market.
Key Takeaways – Best New York REITs Chart
| REIT | Market Cap | Dividend Yield (TTM) | Industry |
|---|---|---|---|
|
$32.77 Billion |
4.97% |
Diversified |
|
|
$14.18 Billion |
6.61% |
Diversified |
|
|
$14.03 Billion |
4.42% |
Retail |
|
|
$6.79 Billion |
4.57% |
Retail |
|
|
$5.32 Billion |
3.25% |
Office |
|
|
$3.66 Billion |
11.80% |
Mortgage |
|
|
$2.25 Billion |
16.38% |
Diversified |
|
|
$1.63 Billion |
12.27% |
Mortgage |
VICI Properties, Inc. (VICI)
- Market Capitalization: $32.77 Billion
- Dividend Yield (TTM): 4.97%
- Industry: REIT – Diversified
- Headquarters: New York City, New York
VICI Properties Inc. (VICI) is a REIT known for owning and managing a portfolio mainly consisting of casinos and entertainment venues. Their assets include 54 gaming facilities and 39 experiential properties across the U.S. and Canada, totaling about 127 million square feet. Caesars Palace, MGM Grand, and the Venetian Resort in Las Vegas are notable properties under their ownership. Additionally, VICI has expanded its holdings to include four championship golf courses and a significant parcel of undeveloped land near the Las Vegas Strip.
VICI’s business strategy emphasizes building a portfolio of high-quality, income-generating experiential assets. They achieve this by partnering with top-tier brands and operators, exploring development opportunities (such as their 33 acres of undeveloped land in Las Vegas), and maintaining a well-structured capital foundation to foster growth.
The company primarily earns its revenue through renting and leasing its properties. A smaller portion of their income comes from a share in gaming revenues, along with other sources like parking and property management fees.
W. P. Carey Inc. (WPC)
- Market Capitalization: $14.18 Billion
- Dividend Yield (TTM): 6.61%
- Industry: REIT – Diversified
- Headquarters: New York City, New York
W. P. Carey Inc. (WPC) is a REIT specializing in net lease properties, celebrating its 50th year in operation. The company has a diverse and high-quality portfolio, including 1,413 net lease properties spanning about 171 million square feet and 86 self-storage facilities. WPC primarily invests in properties crucial for the operations of single tenants, focusing on industrial, warehouse, and retail spaces. These properties are mainly located in the United States and in Northern and Western Europe. They are typically under long-term net leases, including regular rent increases provisions.
A significant recent change for W. P. Carey has been the separation of its office property holdings into a new, distinct entity, NLOP. Although this spin-off initially met with a lukewarm response from the market, it is expected to enhance W. P. Carey’s overall business strategy. Post spin-off, the company’s portfolio is more concentrated on industrial, warehouse, and retail assets, sectors that are believed to have better growth opportunities in the medium to long term. This strategic shift is intended to refine WPC’s focus and is anticipated to lead to a higher market valuation in the future potentially.
Kimco Realty Corporation (KIM)
- Market Capitalization: $14.03 Billion
- Dividend Yield (TTM): 4.42%
- Industry: REIT – Retail
- Headquarters: Jericho, New York
Kimco Realty Corporation (KIM), with a history of over 60 years, focuses on owning, managing, acquiring, and redeveloping shopping centers. As of September 2023, Kimco has interests in 527 shopping centers and mixed-use properties across the U.S., totaling 90 million square feet of rentable space. The company’s properties are strategically located in the suburbs close to major cities, focusing on areas with high entry barriers, like coastal markets, and rapidly growing Sun Belt regions.
In its commitment to environmental, social, and governance (ESG) practices, Kimco has made significant strides as detailed in its Corporate Responsibility Report. Notable accomplishments include dedicating spaces for outdoor community activities in more than 20% of their properties and enhancing water efficiency in these areas by over 20% since 2020. Additionally, Kimco invests upwards of $10 million each year in eco-friendly initiatives such as efficient lighting, smart metering systems, and irrigation projects to meet its ESG objectives, including specific science-based targets. To reinforce its ESG commitment, Kimco has linked its executives’ compensation to achieving ESG milestones and has expanded its ESG-focused team.
Brixmor Property Group Inc. (BRX)
- Market Capitalization: $6.79 Billion
- Dividend Yield (TTM): 4.57%
- Industry: REIT – Retail
- Headquarters: New York City, New York
Brixmor Property Group Inc. (BRX) specializes in owning and operating open-air shopping centers across the United States. Its portfolio has grown to encompass 380 retail centers, which together offer around 67 million square feet of premium retail space. These centers are strategically located in established commercial areas.
The company’s leasing strategy is diverse, offering various types of retail spaces, including standard units, pad sites or outparcels for standalone establishments, flexible short-term or pop-up spaces, and second-generation spaces previously used by other retailers. Brixmor is also actively acquiring new properties and redeveloping existing ones. Their ongoing and completed redevelopment projects demonstrate their commitment to improving and expanding their portfolio.
Brixmor strongly emphasizes corporate responsibility, incorporating Environmental, Social, and Governance (ESG) principles in its business operations. As outlined in their latest Corporate Responsibility Report, Brixmor has made significant progress in reducing Scope 1 and 2 greenhouse gas emissions, increasing on-site renewable energy systems, and transitioning a large portion of their properties to energy-efficient LED lighting.
Additionally, Brixmor is committed to advancing Diversity, Equity, and Inclusion (DEI) within its operations. This is evident through their inclusive hiring practices, support for early career development, mentorship programs, and educational initiatives. The company has maintained an average gender pay gap of zero for several years and has also tied the bonuses of its executives to the achievement of specific ESG objectives.
Vornado Realty Trust (VNO)
- Market Capitalization: $5.32 Billion
- Dividend Yield (TTM): 3.25%
- Industry: REIT – Office
- Headquarters: New York City, New York
Vornado Realty Trust (VNO) is a real estate company focusing on office and retail properties, predominantly in New York City, with additional critical holdings in Chicago and San Francisco. The company’s portfolio is primarily divided into two categories: approximately 20 million square feet of high-end office space in New York City’s prime urban areas, and over 2.4 million square feet of Manhattan street retail, making it the largest owner and manager in this sector. Additionally, Vornado owns nearly 2 million square feet of prime retail spaces and significant advertising displays in areas with high foot traffic, such as Times Square and the entrance to Pennsylvania Station on 34th Street.
Vornado is deeply committed to sustainability, evident in their policy of integrating eco-friendly practices into their properties, operations, and corporate ethos. This commitment not only aligns with environmental responsibility but also provides a competitive edge in sustainable real estate management.
The company has ambitious goals, including reducing its energy consumption by 50% by 2030, enhancing water efficiency, and minimizing waste production. Furthermore, Vornado aims to achieve net-zero carbon emissions by 2050 and has initiated several projects to support this objective. These projects include developing renewable energy sources on-site, eliminating the use of fuel oil, transitioning to electricity from renewable sources, and electrifying their operations. Vornado has also invested heavily in sustainable initiatives, such as upgrading a large portion of their buildings to energy-efficient LED lighting and starting organic waste recycling programs in their New York office locations.
Blackstone Mortgage Trust, Inc. (BXMT)
- Market Capitalization: $3.66 Billion
- Dividend Yield (TTM): 11.80%
- Industry: REIT – Mortgage
- Headquarters: New York City, New York
Blackstone Mortgage Trust, Inc. (BXMT) is a company that specializes in creating senior loans backed by commercial real estate. Their operations are mainly in North America, Europe, and Australia, where they focus on providing financing for high-quality, large-scale (institutional-grade) real estate projects.
Founded in 1998, Blackstone Mortgage Trust’s primary goal is safeguarding and growing its shareholders’ investments while delivering attractive returns adjusted for risk. These returns are generated mainly from the income produced by its diverse loan portfolio.
The company’s loan portfolio consists mainly of loans backed by high-end, institutional properties in major global markets. The entities that receive these loans are typically experienced and financially robust real estate investors and operators. Blackstone Mortgage Trust employs various financing strategies to fund these senior loans, always keeping in line with its commitment to careful investment management.
Global Net Lease (GNL)
- Market Capitalization: $2.25 Billion
- Dividend Yield (TTM): 16.38%
- Industry: REIT – Diversified
- Headquarters: New York City, New York
Global Net Lease, Inc. (NYSE: GNL) is a REIT specializing in acquiring a diverse range of commercial properties globally. The company’s primary focus is sale-leaseback deals, which involve single-tenant properties essential for the tenant’s operations (termed “mission-critical”) and generate consistent rental income. These properties are net-leased, meaning tenants cover most of the operating expenses. GNL’s investments are primarily in the United States, Western and Northern Europe, and strategically chosen Necessity Retail locations.
GNL’s investment approach, centered on sale-leaseback transactions with single-tenant, mission-critical properties, ensures a stable and predictable rental income stream. This approach enhances the stability and longevity of the company’s operations. GNL targets investment-grade tenants known for stable cash flows, focuses on long-term leases with contractual rent increases, and maintains a solid financial position characterized by a conservative capital structure, robust cash flows, and low debt levels.
As of 2023, GNL’s portfolio includes more than 1,300 properties across 11 countries, covering over 66 million square feet. This portfolio, valued at $9.2 billion, is carefully curated through a stringent investment and underwriting process. It primarily comprises industrial and distribution facilities, necessity retail spaces, and mission-critical office properties in the U.S. and Western Europe. GNL reports a high occupancy rate of 96% and notes that 58% of its Straight Line Rent (a measure of rent income) comes from tenants with investment-grade credit ratings.
Apollo Commercial RE Finance, Inc. (ARI)
- Market Capitalization: $1.63 Billion
- Dividend Yield (TTM): 12.27%
- Industry: REIT – Mortgage
- Headquarters: New York City, New York
Apollo Commercial Real Estate Finance, Inc. (ARI) is a REIT that primarily provides, acquires, invests in, and manages a range of commercial real estate debt instruments. These include first mortgage loans and subordinate financings. ARI operates both in the United States and Europe.
A notable feature of ARI’s business model is its high use of leverage, with a debt-to-equity ratio of about 3.05. This leverage is key to generating high dividend yields for its shareholders. However, it also introduces an element of risk, particularly given the real estate market’s tendency to fluctuate cyclically.
Current macroeconomic conditions, such as the prevailing inflation and the potential for economic downturns, pose additional risks to ARI. These factors can significantly affect the broader real estate market, which in turn can impact ARI’s financial stability. While higher interest rates might initially increase returns, they could also harm long-term sustainability if they lead to decreased economic activity and fewer new mortgage loans.
Despite these risks, ARI might be an attractive option for investors seeking undervalued assets. This is suggested by its price-to-book (P/B) ratio of 0.77, which is lower than many of its competitors. This implies that the market may underestimate the company’s net asset value.
