For Immediate Release
Chicago, IL – July 7, 2026 – Today, Zacks Equity Research discusses Pebblebrook Hotel Trust PEB, Hudson Pacific Properties, Inc. HPP and STAG Industrial, Inc. STAG.
Industry: Equity REITs
Link: https://www.zacks.com/commentary/2948346/3-equity-reit-stocks-to-watch-amid-rising-demand-trends
The REIT and Equity Trust - Other industry has a favorable outlook as AI-ready infrastructure, high-quality industrial assets, lodging properties and modern office spaces gain importance. REITs such as Pebblebrook Hotel Trust, Hudson Pacific Properties, Inc. and STAG Industrial, Inc. benefit from exposure to innovation hubs, travel recovery, e-commerce, supply-chain shifts and scarce, purpose-built properties tied closely to tenant needs.
Still, growth is not risk-free. Attractive assets can be costly to build, upgrade and operate, while financing limits, construction inflation, labor tightness and project delays may pressure returns without disciplined execution.
About the Industry
The Zacks REIT and Equity Trust - Other sector comprises a diverse collection of REIT stocks representing various asset categories, including industrial, office, lodging, healthcare, self-storage, data centers, infrastructure and more. Equity REITs lease out space within these properties to tenants, generating income through rental payments.
Economic growth assumes a central role within the real estate sector as economic expansion directly correlates with higher demand for real estate, increased occupancy rates and greater bargaining power for landlords to command higher rental rates. The performance of Equity REITs hinges on the specific dynamics of their underlying assets and the geographic location of their properties. In today’s world, real estate is becoming more closely tied to how companies operate, how technology grows, and how people use specialized spaces.
What's Shaping the Future of the REIT and Equity Trust - Other Industry?
AI-Ready Real Estate Is Becoming a Clear Advantage: There is a rising need for properties that can support heavier digital use. As companies depend more on artificial intelligence, cloud services, secure data handling and constant connectivity, the real estate behind these systems is becoming more valuable.
Data centers, communication towers and fiber-linked assets are no longer seen as simple support facilities. They are part of the core setup that allows businesses to store information, process it quickly and stay connected with customers and employees. This gives REITs in this area a strong long-term role, but only when they can offer reliable power, technical capacity, strong operations and room for tenant growth.
High-Quality Properties Are Getting More Attention: Another positive trend is that useful, purpose-built properties are gaining more importance. Industrial and logistics facilities, health care buildings, life science assets, lodging properties, communication infrastructure and selected modern office buildings all serve practical needs that tenants cannot easily ignore.
Companies are more careful about space today, but they still need buildings that help them move products, treat patients, support research, host business travel, improve connectivity or bring employees together in better-quality workplaces. This makes the quality and function of the asset more important than simply owning a large portfolio.
For REITs, the stronger opportunity is in properties that are closely tied to tenant operations and harder to replace with cheaper or less suitable space. In offices, demand favors modern, well-located spaces that support in-person work. In industrial, efficient facilities help companies manage supply chains and automation. In health care and life sciences, demand is tied to care delivery, research and specialized operations. In storage, operators are using data, pricing tools and careful expansion to protect value.
Costs and Execution Risks Remain a Pressure Point: The main negative is that demand does not automatically turn into easy growth. Many of the most attractive REIT property types are expensive to build, upgrade and operate. Data centers need large power commitments, cooling systems, technical planning and strong infrastructure. Health care and life science properties often require special layouts, compliance standards and ongoing investment.
Logistics assets may need modern design, automation support and strong access points. At the same time, financing can be harder to secure, construction costs remain a concern, labor can be tight, and project delays can affect returns. This means the next phase of the REIT industry will likely favor owners that are selective, patient and financially disciplined. The opportunity is real, but chasing growth without careful execution could create more pressure than progress.
Zacks Industry Rank Indicates Bright Prospects
The Zacks REIT and Equity Trust - Other industry is housed within the broader Finance sector. It carries a Zacks Industry Rank #67, which places it in the top 27% of 246 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates healthy near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of the northward revision of funds from operations (FFO) per share outlook for the constituent companies in aggregate. Looking at the aggregate FFO per share estimate revisions, it appears that analysts are gaining confidence in this group’s growth potential of late.
Before we present a few stocks that you might want to consider for your portfolio, let’s take a look at the industry’s recent stock market performance and valuation picture.
Industry Lags Stock Market Performance
The REIT and Equity Trust - Other Industry has underperformed the S&P 500 composite and the broader Zacks Finance sector in a year.
The industry has risen 12.6% during this period compared with the S&P 500’s growth of 23.5% and the broader Finance sector’s 13.2% increase.
Industry's Current Valuation
On the basis of the forward 12-month price-to-FFO ratio, which is a commonly used multiple for valuing REIT - Others, we see that the industry is currently trading at 17.23 compared with the S&P 500’s forward 12-month price-to-earnings (P/E) of 20.75. However, the industry is trading above the Finance sector’s forward 12-month P/E of 16.42.
Over the last five years, the industry has traded as high as 22.27X and as low as 12.86X, with a median of 15.81X.
3 REIT and Equity Trust - Other Stocks to Buy
Hudson Pacific Properties: This REIT is focused on high-quality office and studio assets in leading West Coast innovation and media markets. The company’s portfolio spans the San Francisco Bay Area, Seattle, Los Angeles and Vancouver, with about 12.9 million square feet of in-service office space and 45 studio stages.
Its assets serve technology, media, entertainment and professional-services tenants seeking modern, well-located work and production environments.
HPP offers investors exposure to markets shaped by AI, technology and content creation. Around 75% of its annualized base rent is tied to the San Francisco Bay Area, one of the world’s deepest innovation hubs.
With premium office properties, a differentiated studio platform and locations in supply-constrained markets, HPP is positioned to benefit as tenant demand strengthens.
HPP currently sports a Zacks Rank #1 (Strong Buy). The stock has rallied 15.8% over the past month. The consensus mark for 2026 FFO per share has been revised upward over the past two months to $1.05. The consensus estimate for 2027 FFO per share has moved north over the same time frame. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pebblebrook Hotel Trust: This is a lodging REIT focused on urban and resort hotels in major U.S. gateway and leisure markets. Its portfolio is concentrated in luxury and upper-upscale assets, with a balanced demand mix across leisure transient, business transient, leisure group and business group travel.
Currently, the portfolio comprises 43 hotels, totaling around 10,900 guest rooms across 13 urban and resort markets.
PEB’s investment thesis centers on quality assets, recovery upside and disciplined capital allocation. The company sees about $90 million of potential Hotel EBITDA upside through 2028, supported by urban normalization, resort ramp-up and redevelopment returns.
Its markets face limited new supply, forecast at roughly 0.5% in 2026, which can support pricing power. With 81% of hotels largely unencumbered and 90% fee-simple or preferred-ground-lease ownership, PEB offers meaningful flexibility and appeal for investors.
PEB currently sports a Zacks Rank #1. The stock has gained 11.5% over the past month. The consensus mark for 2026 FFO per share has been revised 2.4% upward over the past month to $1.68 per share, suggesting a 6.33% increase year over year.
STAG Industrial: This is a pure-play industrial REIT focused on owning and operating warehouse, distribution and light manufacturing properties across major U.S. industrial markets. The company’s platform spans 601 buildings and about 120.3 million square feet across 41 states, with a strategy centered on diversified industrial real estate and disciplined operations.
STAG offers investors exposure to durable demand drivers such as e-commerce, supply-chain reconfiguration, nearshoring and onshoring.
Around 31% of its portfolio handles e-commerce activity, and about one-third is located within 60 miles of major megasite projects. With broad market coverage, embedded rent growth and limited secured debt, STAG presents a scalable industrial growth platform.
STAG currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for 2026 FFO per share has been raised marginally over the past month to $2.64, suggesting a 3.53% year-over-year increase. The stock has risen 5.4% over the past month.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Pebblebrook Hotel Trust (PEB): Free Stock Analysis Report
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Stag Industrial, Inc. (STAG): Free Stock Analysis Report
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