Largest REITs by Sector

Sector Overview of the Largest REITs

Publicly traded REIT is one of the largest components of the financial sector and in the S&P 500. From August 31, 2016 REITs will become its own sector within the GSCI classification. This is expected after all, real estate asset is on every street in America. See our complete list of REITS.

The largest REIT shown below highlights the major players within each sub sector in the REIT space where we used the market capitalization metric as proxy for size. While there are global REIT ETFs, we just focus on individual REITs in this research note. dual listed REITs.

Current theme in the REIT sector is casting off diversified investment across the real estate sector and focus on specific markets like malls, office or health care. This provides opportunity of deploying capital towards specific sectors within the REIT market. The list shows whose who in the each real estate sector and their differentiated approach in operating, investing and managing capital.

Largest REIT by Market

Name

Symbol

Market Cap

Market

Simon Property Group Inc.

SPG

$58,740 Mil

Mall

General Growth Properties Inc.

GGP

$25,483 Mil

Mall

Equity Residential

EQR

$28,970 Mil

Apartment

Health Care REIT Inc.

HCN

$26,559 Mil

Health Care

Host Hotels & Resorts Inc.

HST

$15,662 Mil

Hotel

Prologis Inc.

PLD

$22,181 Mil

Industrial

Vornado Realty Trust

VNO

$20,220 Mil

Office

Boston Properties Inc.

BXP

$21,150 Mil

Office

SL Green Realty Corp.

SLG

$12,705 Mil

Office

Public Storage

PSA

$33,447 Mil

Self Storage

DDR Corp

DDR

$6,429 Mil

Strip Center

Largest Mall REIT

The retail mall REIT is led by Simon Property Group (SPG) and General Growth Properties (GGP). Simon’s core business is owning high end malls and outlets centres. It owns more than 300 malls and strip centres with over 240 million SF of leasable area. Recent proposal to purchase Macerich shows it is not afraid of doing big deals to get hands on the best of malls in America but also that it will walk away and not overpay.

Both SPG and GGP a specialized owner and operator of best in class mall assets and is a play on middle to high end US consumer. It benefits indirectly through increase in disposable income through higher consumer spending which means it could charge more for leasing their malls to retailers.

While risks for mall REIT include structural shift in consumer spend towards online. This means overall demand for retailers would slow going forward. There is also a focus on shifting preference for malls with premium or high traffic access. This is a reflection on the recovery of high end market post crises while middle and low income spending has lagged.

Key metrics to keep an eye on for the mall REIT includes

  1. Same store sale performance of the retailers in the malls
  2. National Retail Sales
  3. consumer sentiment figures (like the Michigan Consumer Index)

Largest Apartment REIT

Equity Residential (EQR) is one of the largest apartment landlord in the US. In addition to developments. It owns and operate more than 100k apartment units in selected high value markets such as New York, LA and DC where supply is limited due to local structural constraints.

 

Largest Health Care REIT

Health Care REIT (HCN) focus on investing in health care properties in US (87%), UK (7%) and Canada (5%). It owns properties that are directly in the healthcare sector like senior living, long term care and medical centers.

Theoretically this exposure should provide a lower level of tenant turnover and volatility in earnings. This shows in the dividend yield of HCN is materially higher than Mall or Apartment REIT. This is due to the strong pricing power of the underlying consumer demand and hence tenant income. Thematic thesis should be supported by the retirement of the baby boomers which support health related spending going forward.

 

Largest Office REIT

First thing investors think about REIT, office and retail sectors comes to mind immediately. Vornado Realty Trust (VNO), SL Green (SLG) and Boston Properties (BXP) are the most well known office landlords. There is a high degree of cross over as all 3 focus on high end office buildings in NYC, Boston and Washington DC.

 

Investors in these REIT will benefit from preferential REIT taxation rules.