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Texas REITs: Top Picks for the Lone Star State’s Real Estate Market

The Lone Star State of Texas is known for its diverse economy, favorable business climate, and booming real estate market. One of the most popular and efficient ways to invest in this flourishing market is through Real Estate Investment Trusts, or REITs. In this post, we will explore the best Texas REITs that have consistently generated impressive returns for their investors.

Best REITs in Texas at a Glance

Best REITs in Texas

Key Takeaways – Best Texas REITs Chart

REIT Market Cap Dividend Yield (TTM) Industry
$254.89 million
$11.16 billion
$58.26 billion
Communications, 5G
$26.47 billion
Data Center
$1.09 billion
$1.114 billion
$5.476 billion
$438.89 million

Braemar Hotels & Resorts (BHR)

Market Capitalization: $254.89 million

Dividend Yield (TTM): 3.11%

Type of REIT: Equity REIT

Industry: REIT – Hospitality

Headquarters: Dallas, Texas

Introducing Braemar Hotels & Resorts

For investors seeking a distinguished REIT that concentrates on luxury and upscale hotel properties, Braemar Hotels & Resorts is an ideal choice. This Texas REIT is dedicated to providing discerning travelers with high-quality accommodations throughout the United States.

Braemar owns properties across multiple states in the U.S., such as California, Texas, Washington, Pennsylvania, Florida, and Illinois. Additionally, they have properties in Washington, D.C. and St. Thomas in the U.S. Virgin Islands. The company’s diverse geographic presence allows it to access multiple markets and serve a wide range of clientele.

A key factor contributing to Braemar’s success is its emphasis on high revenue per available room (RevPAR) properties. The company is targeting the luxury and upscale segments. This leads to higher returns on investment.

Braemar has established partnerships with some of the most prestigious brands, such as Marriott, Hilton, Courtyard, and Renaissance. These affiliations not only enhance the company’s reputation but also provide access to valuable resources like reservation systems and loyalty programs, further solidifying Braemar’s competitive advantage.

Braemar Hotels & Resorts’ Portfolio

Braemar Hotels & Resorts has a geographically diverse portfolio consisting of 16 hotel properties. These properties are spread across seven states, the District of Columbia, Puerto Rico, and St. Thomas, U.S. Virgin Islands. The total number of rooms in their properties amounts to 4,181, or 3,946 net rooms.

Braemar owns 16 hotel properties. Nine of these are affiliated with Marriott International, Inc. (Marriott) and Hilton Worldwide, Inc. (Hilton).

Other management affiliations include Accor Management US Inc. (Accor), Hyatt Corporation (Hyatt), Four Seasons Hotels Limited (Four Seasons), and Remington Hotels.

Camden Property Trust (CPT)

Market Capitalization: $11.16 billion

Dividend Yield (TTM): 3.65%

Type of REIT: Equity REIT

Industry: REIT – Multifamily

Headquarters: Houston, Texas

Introducing Camden Property Trust

Camden Property Trust is a prominent Texas REIT focusing on acquiring, managing, and developing multifamily apartment communities throughout the United States.

Camden Property Trust’s real estate portfolio is mainly made up of apartment properties in the Sun Belt. The region is well-known for its population and economic growth. This strategic positioning enables the company to capitalize on the increasing demand for quality rental housing in these dynamic markets.

Camden Property Trust generates the majority of its revenue from leasing properties to tenants through short-term agreements. This approach ensures a consistent income stream while allowing the company to adapt to changing market conditions and tenant preferences. 

Camden Property Trust’s Portfolio

Camden Property Trust’s portfolio comprises a variety of property types, including mid-rise buildings, two and three-story structures in landscaped settings, and high-rise buildings. These properties provide residents with a wide range of amenities commonly found in multifamily rental properties, ensuring a comfortable and enjoyable living experience.

As of December 31, 2022, Camden Property Trust owned interests and operated 172 properties, with an average living area of 960 square feet per apartment home. During the year, no single operating property accounted for more than 1.4% of the company’s total revenues. The stabilized operating properties had a weighted average occupancy rate of approximately 96% and 97%.

The average monthly rental rate per apartment home was $1,881 and $1,671 for the same periods, respectively. Camden Property Trust’s average resident lease terms are approximately fourteen months.

Crown Castle Inc (CCI)

Market Capitalization: $58.26 billion

Dividend Yield (TTM): 4.52%

Type of REIT: Equity REIT

Industry: REIT – Communications, 5G

Headquarters: Houston, Texas

Introducing Crown Castle Inc

Crown Castle Inc is a distinct REIT specializing in owning and leasing cell towers and fiber infrastructure across the United States. As an essential contributor to the telecommunications industry, this Texas REIT provides vital infrastructure supporting numerous service providers’ wireless networks.

With an extensive network comprising approximately 40,000 cell towers and over 85,000 route miles of fiber, Crown Castle has established itself as a significant partner in the telecommunications field. Their primary clients are wireless service providers who lease space on Crown Castle’s towers to install necessary network equipment. Furthermore, these providers utilize the company’s comprehensive fiber infrastructure to establish small-cell network infrastructures.

Strategically positioned in major U.S. cities, Crown Castle ensures optimal coverage and accessibility for its clients. The company has a highly concentrated customer base, with over 70% of revenue generated from the top three U.S. mobile carriers, highlighting Crown Castle’s critical role in the industry.

Crown Castle Inc’s Portfolio

Crown Castle owns, leases, or manages over 40,000 towers, which vary in height from 50 to 300 feet. These towers support the wireless equipment of numerous tenants. To help these towers, tracts of land accommodate the towers, equipment shelters, and, when necessary, guy wires for stabilization.

In addition to towers, Crown Castle owns or leases approximately 85,000 route miles of fiber. This extensive fiber network primarily supports around 120,000 small cells, operational or under contract. Most of the company’s fiber assets are strategically located in major metropolitan areas. These small cells and fiber infrastructures are typically found outdoors, often attached to public right-of-way infrastructure like utility poles or street lights.

Digital Realty Trust Inc (DLR)

Market Capitalization: $26.47 billion

Dividend Yield (TTM): 5.37%

Type of REIT: Equity REIT

Industry: REIT – Data Center

Headquarters: Austin, Texas

Introducing Digital Realty Trust Inc

Digital Realty Trust Inc is a REIT dedicated to providing data center solutions tailored to the specific requirements of its clients.

This Texas REIT offers a wide range of services. They cater to enterprises in need of retail co-location solutions. Additionally, they provide solutions to hyperscale cloud service providers seeking “cold shells” or large, power-connected facilities. In recent years, the company has shifted its focus toward higher-level services, enabling tenants to outsource their IT needs to a reliable partner.

Digital Realty Trust Inc’s Portfolio

Digital Realty Trust Inc operates an extensive portfolio of 316 data centers across five continents as of December 31, 2022.

It encompasses nearly 40 million rentable square feet. Notably, all data centers within the portfolio are held in fee simple.

Netstreit Corp (NTST)

Market Capitalization: $1.09 billion

Dividend Yield (TTM): 4.27%

Type of REIT: Equity REIT

Industry: REIT – Retail

Headquarters: Dallas, Texas

Introducing Netstreit Corp

Netstreit Corp stands out as a unique umbrella partnership REIT. This Texas REIT specializes in acquiring, owning, and managing commercial single-tenant lease properties. A significant portion of these properties is long-term triple-net leases. Tenants are generally responsible for all property improvements and are contractually required to cover all operating expenses, including real estate taxes, utilities, and maintenance costs.

Various prominent brands, including 7/11, Walgreens, Walmart, and CVS, are among Netstreit Corp’s tenants. These high-quality and widely recognized tenants contribute significantly to the company’s stability. Consequently, Netstreit Corp can ensure timely rent collection, even during extreme difficulties, such as the pandemic.

Netstreit Corp’s Portfolio

As of December 31, 2022, Netstreit Corp’s portfolio comprised 427 single-tenant retail net leased properties, acquired across 43 states. In 2022, the company acquired 105 single-tenant retail net lease properties. The total purchase price was $424.8 million.

Netstreit Corp’s holdings encompass 25 distinct retail sectors and include 80 different tenants. The total area of their portfolio amounts to 8.5 million square feet, and their occupancy rate was 100%.

NexPoint Residential Trust Inc (NXRT)

Market Capitalization: $1.114 billion

Dividend Yield (TTM): 3.67%

Type of REIT: Equity REIT

Industry: REIT – Multifamily

Headquarters: Dallas, Texas

Introducing NexPoint Residential Trust Inc

NexPoint Residential Trust Inc is a Texas REIT specializing in acquiring, managing, and enhancing Class B multifamily residential properties. The company’s primary focus is on properties in the Sun Belt region, aiming to address the growing demand for affordable housing among middle-income families.

In this region, Class B residential properties are undersupplied compared to Class A and C properties. As a result, NXRT anticipates that Class B affordable housing will demonstrate more robust performance in the market.

An outstanding factor of NexPoint Residential Trust Inc is its value-adding investment approach. By providing upgraded amenities, the company strives to improve the overall living experience of its residents. Consequently, this may lead to an increase in property values and rental income.

NexPoint Residential Trust Inc’s Portfolio

As of December 31, 2022, NexPoint Residential Trust Inc’s portfolio comprises 40 properties, with a total of 15,127 units across seven states. The average monthly rent per unit is $1,480, and the company boasts a strong occupancy rate of 94.2%.

Spirit Realty Capital Inc (SRC)

Market Capitalization: $5.476 billion

Dividend Yield (TTM): 6.78%

Type of REIT: Equity REIT

Industry: REIT – Retail

Headquarters: Dallas, Texas

Introducing Spirit Realty Capital Inc

Spirit Realty Capital Inc is a leading Texas REIT, primarily focusing on leasing properties across the United States. As a reputable player in the industry, Spirit Realty has established a niche in acquiring real estate through innovative sale-leaseback transactions. Spirit Realty purchases properties from tenants. The tenants then enter into a long-term agreement to lease the property back from Spirit Realty. This strategy allows businesses to unlock capital while maintaining the use of their properties.

Spirit Realty has a diverse range of tenants. This includes general merchandise companies, casual dining chains, and quick-service restaurant chains. All of these tenants significantly contribute to the company’s rental income.

One of the key strengths of Spirit Realty Capital Inc is its diverse real estate assets evenly distributed throughout the United States. This broad distribution mitigates risks associated with regional economic fluctuations and offers investors exposure to a wide range of markets.

Spirit Realty Capital Inc’s Portfolio

As of December 31, 2022, Spirit Realty Capital Inc managed a total of 2,115 properties. These properties are strategically spread across 49 states.

One of the standout features of Spirit Realty’s portfolio is its remarkable occupancy rate. At 99.9%, this near-perfect occupancy rate underscores the company’s ability to maintain high levels of tenant satisfaction and retention.

The company’s tenant base encompasses 351 tenants from 34 distinct industries. This diversity not only mitigates the company’s reliance on any single sector but also ensures a more stable and resilient income stream.

Whitestone REIT (WSR)

Market Capitalization: $438.89 million

Dividend Yield (TTM): 5.41%

Type of REIT: Equity REIT

Industry: REIT – Retail

Headquarters: Houston, Texas

Introducing Whitestone REIT

Whitestone REIT focuses on buying, owning, managing, and developing open-air retail centers. These centers are located in some of the fastest-growing markets in the United States. This Texas REIT has established its presence in thriving cities such as Phoenix, Austin, Dallas-Fort Worth, Houston, and San Antonio.

A key aspect of Whitestone REIT’s approach is its focus on convenience for the surrounding communities. The company ensures that its retail centers offer a mix of service-oriented tenants, catering to the essential needs of local residents. This mix includes businesses in the food industry, self-care providers, financial and logistics service providers, and education and entertainment establishments.

Whitestone REIT believes that maintaining strong community connections and fostering deep tenant relationships are crucial to the success of its retail centers. By nurturing these relationships, the company can better understand the unique needs of each community and adapt its acquisition strategy accordingly.

Whitestone REIT’s Portfolio

As of December 31, 2022, Whitestone REIT’s portfolio consisted of 57 wholly-owned commercial properties spread across various locations in the United States. These properties include 14 in Houston, nine in Dallas-Fort Worth, three in San Antonio, and five in Austin, all of which are situated in Texas. Additionally, there are 25 properties in the Scottsdale and Phoenix metropolitan areas of Arizona, and one property in Buffalo Grove, Illinois, a suburb of Chicago.

Whitestone REIT’s tenant base comprises national, regional, and local businesses. The properties typically attract tenants who provide basic staples, convenience items, and services. As a result, the returns are more stable as daily sales of essential items are less susceptible to fluctuations when compared to higher-priced retail items. Also, the largest tenant of Whitestone REIT accounts for only 2.2% of the total revenues for the year ended December 31, 2022, indicating a well-diversified tenant base.

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