The quote “Buy land, they aren’t making it anymore” may have been coined by Mark Twain more than 100 years ago, but landlord companies have been following the motto today to make a mint over the past several years.
Real estate investment trusts as they’re more formally known as, or REITs for short, are investment firms that make their living by buying all the property they can get their hands on, with the intention to lease those properties and perhaps sell them later for a big profit. And with more businesses and individuals choosing to rent instead of own these days, they’re quickly becoming some of the fastest-growing companies in the US.
The kinds of REITs — and properties they buy — can vary wildly. More mainstream REITs lease out office space, apartments, or nursing homes (think of the Sandpiper Crossing community on the hit TV show Better Call Saul). More specialized REITs like CubeSmart rent out self-storage units, while others like Sun Communities lease modular homes and RVs from trailer park communities. In other words, if it’s something you can buy to shelter people or things, chances are there’s a REIT for that.
So what kinds of REITs have been really taking off over the past year?
To find out, we used the Hoover’s Build-A-List tool to screen through the nearly 2,000 REITs that reported financial data on our Dun & Bradstreet database. Then we trimmed down the list by excluding REITs that buy property-linked investment securities to reveal only landlords that actually owned physical properties. Finally, we sorted the results by which of these companies had the largest revenue growth during 2015.
So without further ado, here are the top 10 fastest-growing REITs in America (further details follow the table):
|The Top 10 Fastest-Growing REITs in America (2015)|
|Source: Dun & Bradstreet, Hoover’s Build-A-List|
10. Medical Properties Trust
2015 Revenue Growth: 41%
Total Revenue: $442 million
Strategy: Aiming to take advantage of one of the largest sectors of the US economy, Medical Properties Trust invests in healthcare properties such as acute-care facilities, and community and rehabilitation hospitals.
9. QTS Realty Trust
2015 Revenue Growth: 43%
Total Revenue: $311 million
Strategy: In the world of server farms, QTS (Quality Technology Services) sows a lot of concrete. The REIT acquires and leases secure office buildings that house nearly 5 million sq. ft. of server-filled data centers.
8. Sun Communities
2015 Revenue Growth: 43%
Total Revenue: $675 million
Strategy: When renters find traditional housing too pricey, Sun Communities is here to help. The REIT leases its 200 manufactured-housing communities (i.e., trailer and RV parks) in 30 US states, with about half of its revenue coming from Michigan and sunny Florida.
7. Omega Healthcare Investors
2015 Revenue Growth: 47%
Total Revenue: $744 million
Strategy: With the US population continuing to age, Omega’s focus on buying and leasing long-term senior living and skilled nursing facilities is proving to be a smart bet.
6. American Homes 4 Rent
2015 Revenue Growth: 58%
Total Revenue: $631 million
Strategy: For those that don’t want to be house poor, there’s American Homes 4 Rent, which owns and leases nearly 40,000 single-family houses in 20 states in the West, Southeast, and Midwest. Its recent acquisition of American Residential Properties made it the US’s second-largest landlord of single-family houses behind Blackstone Group.
5. Wheeler Real Estate Investment Trust
2015 Revenue Growth: 62%
Total Revenue: $28 million
Strategy: The Virginia Beach, Virginia-based REIT invests in commercial retail properties with a preference toward grocery-anchored shopping centers that attract healthy amounts of foot traffic.
4. Ashford Hospitality Trust
2015 Revenue Growth: 68%
Total Revenue: $1.34 billion
Strategy: Ashford Hospitality can tell you firsthand that luxury lodging is on the up. The hotel owner likes to invest in luxury hotels — including Embassy Suites, Hilton, Marriott, Hyatt, Starwood, and Intercontinental Hotels Group branded ones — with RevPARs (revenue per available room) of twice the national average.
3. Select Income REIT
2015 Revenue Growth: 92%
Total Revenue: $428 million
Strategy: Hawaii’s largest industrial property owner manages nearly 45 million sq. ft. of leasable single-tenant commercial and industrial property in its home state and 34 other US states. Its tenants have included an oil refinery for Tesoro and a Coca-Cola bottling plant and distribution center.
2. Preferred Apartment Communities
2015 Revenue Growth: 93%
Total Revenue: $109 million
Strategy: This landlord prefers to invest in multifamily housing, which has been the top-selling housing type in recent years with more people becoming renters. The REIT manages more than 31,000 apartment units in the country’s top metropolitan cities, including Boston, Dallas, Denver, Los Angeles, New York, Philadelphia, and Washington, DC.
1. Hudson Pacific Properties
2015 Revenue Growth: 106%
Total Revenue: $521 million
Strategy: The fastest-growing REIT for 2015 could actually be considered the star of the show. Hudson Pacific Properties — which makes me think of Hollywood star Rock Hudson — buys and leases office buildings as well as entertainment and production studio properties across Hollywood and other star-studded cities in California. It even owns the Technicolor building and has leased its properties to Warner Bros Entertainment and Warner Music Group.
Want to screen for companies and prospects as I just did? Check out the Hoover’s Build-A-List tool, powered by Dun & Bradstreet‘s massive company database. The user-friendly platform lets you screen through over 85 million companies worldwide and narrow your search by geography, employee count, growth, and dozens of other variables that give you the tools you need to be an effective B2B prospector. See how it works by clicking here or watching the 2-minute video below.
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Christian Hudspeth is a company analyst for Dun & Bradstreet who researches and reports on more than 1,000 banks and financial firms for Hoover’s company database subscribers. Before joining Dun & Bradstreet, Christian was a senior investing analyst for a financial publishing company. His financial articles have been featured on MSN Money, Business Insider, Nasdaq.com, and several other well-known online publications. Before he was an editor, Christian worked in the commercial banking industry for seven years.