Bank of America analyst Jeffrey Spector named seven REITs he favors across a range of property sectors in his latest weekly research note. The selections come as the group of REITs trades at 92% of BofA's estimated net asset value, below the firm's long-term average of 97%. On a forward valuation basis, the average REIT in BofA's coverage is trading at 19.1 times forward funds from operations.
Spector's weekly market snapshot also summarized short-term performance and the firm's near-term outlook for U.S. REITs. For the week of July 2-9, the RMZ index fell 1.0% while the S&P 500 gained 0.8%. Within the REIT complex, communication infrastructure REITs were the relative outperformers with a 1.6% gain, while manufactured housing REITs underperformed, declining 4.0% over the same week. Looking ahead, BofA projects U.S. REIT funds from operations growth of 7.3% in 2026 and 8.3% in 2027.
The seven names Spector highlights:
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Agree Realty Corporation (ADC) - Triple Net: BofA assigns a $92 price objective to ADC, a net-lease REIT concentrated on retail properties leased to omni-channel retailers. Spector notes that ADC carries the highest share of rent coming from investment-grade retailers among net-lease peers covered by BofA. The firm assumes 6% adjusted funds from operations growth for ADC in 2026.
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American Healthcare REIT (AHR) - Healthcare: With a $67 price objective, AHR's portfolio spans senior housing, medical office, skilled nursing facilities and hospitals. BofA's model anticipates 36.9% adjusted funds from operations growth in 2026 for AHR and projects a 19.3% three-year compound annual growth rate. The firm assigns a street-high price objective to AHR.
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AvalonBay Communities (AVB) - Multifamily: BofA's $213 price objective for AVB reflects the REIT's coastal apartment exposure. The analyst cites a legacy coastal portfolio that benefits from structural undersupply and points to the company's development platform, which BofA indicates should deliver mid-6% stabilized yields and act as an earnings tailwind.
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CubeSmart (CUBE) - Self-Storage: CUBE carries a $47 price objective. Spector highlights that CubeSmart has the highest exposure to New York City among self-storage peers in BofA's coverage. The note states that moderating new supply should benefit CUBE disproportionately because its core markets experienced supply peaks earlier than many Sunbelt-heavy competitors.
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Macerich Company (MAC) - Malls: BofA sets a $28 price objective for Macerich. The analyst points to the company's restructuring plan, which is intended to reposition the mall portfolio and produce outsized net operating income growth. The note references a supplemental net operating income pipeline in excess of $100 million that is expected to commence in the second half of 2026.
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Phillips Edison & Company (PECO) - Shopping Centers: PECO is assigned a $45 price objective. Spector highlights the company's acquisition target range of $350-450 million annually at an expected unlevered internal rate of return above 9%. BofA indicates that these acquisition goals should drive funds from operations growth into the mid- to high-single-digit range.
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Welltower Inc. (WELL) - Healthcare: BofA's price objective for Welltower is $277. The firm notes that WELL has the highest exposure to senior housing operating assets within BofA's coverage universe. BofA models a 20.3% three-year compound annual growth rate for WELL, the highest in the healthcare sector, and assigns a street-high price objective.
Spector's selections span diversified property types and emphasize specific operational and portfolio attributes that BofA projects will support earnings growth. Across the group, the firm's forward-looking assumptions and price objectives reflect expected gains in adjusted funds from operations for several names and sector-level growth forecasts for the broader REIT market.
Key takeaways
- BofA's REIT coverage group is trading at 92% of the firm's estimated net asset value, below the long-term average of 97%.
- Analyst price objectives and modeled FFO/AFFO growth rates vary by company and sector, with healthcare and certain specialty REITs showing higher modeled growth in BofA's work.
- Short-term market action for the week of July 2-9 showed dispersion across REIT sectors, with communication infrastructure outperforming and manufactured housing lagging.
Risks and uncertainties
- Near-term index performance can diverge from analyst projections, as illustrated by the RMZ's 1.0% decline over July 2-9 while the S&P 500 rose 0.8% - impacting sectors differently, including manufactured housing and communication infrastructure.
- Company-specific execution risks exist for plans cited by BofA, such as Macerich's restructuring and its supplemental NOI pipeline expected to start in the second half of 2026.
- Supply dynamics in property markets can shift outcomes; for example, CubeSmart's advantage relies on moderating deliveries and earlier supply peaks in its core markets versus Sunbelt peers.