REITs Poised for Recovery as Fed Cuts Rates, 2025 AFFO Growth Expected
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Fool
- REIT Market Recovery: With the Fed cutting rates six times in a row in 2024 and 2025, the attractiveness of Real Estate Investment Trusts (REITs) is rising again, likely drawing in more income-driven investors and driving up valuations.
- Realty Income's Strong Performance: Realty Income, owning over 15,500 commercial properties, reported a 98.7% occupancy rate in the latest quarter and expects its adjusted funds from operations (AFFO) to grow 1%-2% to $4.25-$4.27 per share in 2025, ensuring its $3.22 per share dividend payment.
- Vici Properties' Rent Growth: Vici Properties has maintained a 100% occupancy rate since its 2018 IPO and expects its AFFO per share to rise 4%-5% to $2.36-$2.37 in 2025, supporting its $1.80 per share dividend, showcasing strong resilience against economic headwinds.
- Digital Realty's Recovery Outlook: Despite a decline in AFFO over the past four years, Digital Realty anticipates an 8%-9% growth in core FFO to $7.25-$7.30 per share in 2025, with occupancy rates expected to rise to 84.9%-85.9%, securing its $4.88 per share dividend.
Analyst Views on DLR
Wall Street analysts forecast DLR stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for DLR is 189.06 USD with a low forecast of 139.00 USD and a high forecast of 220.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
18 Analyst Rating
15 Buy
2 Hold
1 Sell
Strong Buy
Current: 160.570
Low
139.00
Averages
189.06
High
220.00
Current: 160.570
Low
139.00
Averages
189.06
High
220.00
About DLR
Digital Realty Trust, Inc. is a real estate investment trust. The Company owns, acquires, develops, and operates data centers through its operating partnership subsidiary, Digital Realty Trust, L.P. The Company is focused on providing data center, colocation, and interconnection solutions for domestic and international customers across a variety of industry verticals ranging from cloud and information technology services, communications and social networking to financial services, manufacturing, energy, healthcare, and consumer products. Its portfolio consists of over 308 data centers, of which 121 are located in the United States, 112 are located in Europe, 36 are located in Latin America, 16 are located in Africa, 16 are located in Asia, six are located in Australia and three are located in Canada. Its PlatformDIGITAL is a global data center platform for scaling digital business which enables customers to deploy their critical infrastructure with a global data center provider.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
