Bank of America Names Seven Top REITs Across Healthcare, Retail, and Multifamily Sectors

Bank of America has identified seven top real estate investment trusts (REITs) spanning multiple property sectors, according to a recent research note from analyst Jeffrey Spector. The selections are presented in a market context where REITs have recently underperformed the broader S&P 500 and are trading at a discount to their long-term average valuation.

Market Context and Outlook

According to the BofA note, the REIT sector is currently trading at 92% of the firm’s estimated net asset value (NAV), below the long-term average of 97%. The average REIT is valued at 19.1 times forward funds from operations (FFO). This valuation follows a period of weakness, with the RMZ index declining 1.0% for the week of July 2-9, in contrast to the S&P 500's 0.8% gain.

Despite the recent lag, Bank of America projects a solid growth trajectory for the sector. The firm forecasts U.S. REIT FFO growth of 7.3% in 2026, accelerating to 8.3% in 2027.

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BofA's Top Selections

Spector’s list highlights companies with distinct catalysts, from high-quality tenant rosters and demographic tailwinds to strong development pipelines. The seven top-rated REITs are:

• Agree Realty (ADC): A triple-net retail REIT noted for having the highest percentage of rent from investment-grade tenants among its peers. BofA assumes 6% adjusted FFO (AFFO) growth in 2026.
• American Healthcare REIT (AHR): A diversified healthcare trust with a portfolio of senior housing and medical facilities. The bank projects significant 36.9% AFFO growth in 2026 and a 19.3% three-year compound annual growth rate (CAGR).
• AvalonBay Communities (AVB): A multifamily REIT focused on coastal markets where a structural housing undersupply provides support. Its development platform is expected to generate stabilized yields in the mid-6% range.
• CubeSmart (CUBE): A self-storage REIT with significant exposure to New York City. BofA believes it will benefit as new supply moderates in its core markets, which peaked earlier than in Sunbelt regions.
• Macerich Company (MAC): A mall REIT whose restructuring plan is aimed at repositioning its portfolio to drive outsized net operating income (NOI) growth. A supplemental NOI pipeline of over $100 million is expected to begin in the second half of 2026.
• Phillips Edison & Company (PECO): A shopping center REIT targeting $350-450 million in annual acquisitions with an unlevered internal rate of return (IRR) of over 9%.
• Welltower Inc. (WELL): A healthcare REIT with the highest exposure to senior housing operating assets in BofA's coverage. The firm models a sector-leading 20.3% three-year FFO CAGR.