Technology has transformed the way all industries work, and that includes real estate investment trusts, says Brad Thomas, chief analyst at iREIT Investor.
REITs traditionally have owned property like malls and office buildings, but they now include cellular towers and even life sciences companies.
In a blog post for Forbes.com, Thomas points to four REITs that are harnessing technology to drive value for investors.
Four Technology Disruptor REITs
Crown Castle (CCI): “Although the company has only been a REIT since January 2015, the company has a long history of performance. Unlike its peer REIT, American Tower, CCI focuses exclusively on US towers and the company boasts a 4 percent dividend yield.”
Digital Realty (DLR): “DLR was the first data center REIT and the company’s first-mover advantage has given the global player a tremendous advantage due to its scale and diversification attributes. DLR has a dividend yield of 4.8 percent.”
Extra Space (EXR): “Extra Space is also a powerful model of repeatability as the leading self-storage REIT has been successful at combining its mobile apps, call centers and revenue management systems to deliver optimal performance. EXR is paying a dividend yield of 3.1 percent.”
Alexandria Real Estate (ARE) “The company commenced operations in 1994 as a life sciences company but over the years the company has extended its focus to becoming a landlord of urban campus innovations in which life science and technology intersect. . ARE’s dividend yield is 3.3 percent.”
Thomas recommended avoiding REITs that own shopping malls, which have been under pressure to compete with online retailers that offer free shipping, lower prices or personalized shopping.
He said CBL Properties (CBL) and Rouse Properties (RSE)have high exposure to troubled mall-based tenants like Sears and JCPenney.
“As a REIT investor, I look for companies that are able to fend off these threats and deliver high returns for many years into the future, Thomas says. “I seek to own companies that have embraced the market disruption associated with e-commerce, hoping to capitalize on innovative products or services that offer wide moat attributes.”
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