Remember when working from an office was the default? Well, those days are long gone. Remote and hybrid work cultures have become the norm, and real estate is feeling the impact. With companies ditching traditional office setups for more flexible work models, the demand for office spaces is evolving.
But that doesn’t mean real estate is losing relevance; it’s just shifting in a different direction. Below, I have highlighted three fundamentally strong REITs: Equinix, Inc. (EQIX), American Tower Corporation (AMT), and Crown Castle Inc. (CCI), which are well-positioned to grow as businesses rethink how they use physical spaces.
As businesses move away from conventional office setups, the focus is shifting toward flexible workspaces, co-working hubs, and digital infrastructure that promote collaboration, creativity, and corporate culture. This shift is driving demand in areas like residential properties in suburban regions, industrial spaces, and especially data centers, which are essential in our increasingly digital world.
That said, the office property sector isn’t entirely obsolete. While demand for traditional office space will likely continue to decline, commercial property developers who embrace flexible layouts, mixed-use spaces, and modernized designs can still thrive in this evolving landscape.
Moreover, Technavio projects that the global REIT market will increase by $350.20 billion between 2024 and 2028 at a CAGR of 2.9%. Therefore, despite the evolving landscape, REITs continue to offer a viable and potentially lucrative investment opportunity for those willing to adapt and innovate.
With that in mind, let’s examine the fundamental aspects of the above-mentioned stocks in detail:
Equinix, Inc. (EQIX)
EQIX is the world’s digital infrastructure company. Customers use EQIX’s trusted platform to bring together and interconnect foundational infrastructure at software speed. It enables organizations to access all the right places, partners, and possibilities to scale with agility, speed the launch of digital services, deliver world-class experiences, and multiply their value.
On February 12, 2025, EQIX’s Board of Directors declared a quarterly cash dividend of $4.69 per share on its common stock, indicating a 10% increase over the previous quarter. The dividend is payable on March 19, 2025, to shareholders of record on February 26, 2025.
EQIX pays an annual dividend of $18.76, which translates to a yield of 2.01% at the current share price. Its four-year average dividend yield is 1.75%. Moreover, the company’s dividend payouts have increased at a CAGR of 14.1% over the past three years. EQIX has raised its dividends for ten consecutive years.
For the fourth quarter that ended December 31, 2024, EQIX’s revenues increased 7.2% year-over-year to $2.26 billion. The company’s gross profit grew 4.6% from the year-ago value to $1.06 billion, while its adjusted EBITDA stood at $1.02 billion, up 10.9% year-over-year. Moreover, EQIX’s AFFO of $770 million and $7.92 per share indicate growth of 11.4% and 8.5% from the prior year’s period, respectively.
The consensus revenue estimate of $2.22 billion for the first quarter (ending March 2025) represents a 4.6% increase year-over-year. The consensus FFO estimate of $6.62 for the current quarter indicates a 13.9% growth from the previous year. The company has an impressive surprise history, surpassing the consensus FFO estimates in three of the trailing four quarters.
EQIX's stock surged 16.5% over the past nine months and 8.8% over the past year, closing the last trading session at $931.90.
EQIX’s strong prospects are reflected in its POWR Ratings. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
EQIX has a B grade for Growth and Stability. It is ranked #2 among four stocks within the REITs – Data Centers industry. To see the other ratings of EQIX for Value, Momentum, Sentiment, and Quality, click here.
American Tower Corporation (AMT)
AMT owns, operates, and develops real estate for multitenant communications. It works primarily on leasing space on multitenant communications to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies, municipalities, and tenants in various industries.
On February 3, 2025, the company paid its shareholders a quarterly dividend of $1.62 per share on its common stock. This reflects AMT’s ongoing commitment to shareholder returns.
AMT has raised its dividends for 12 consecutive years. It pays an annual dividend of $6.48, which translates to a yield of 3.42% at the current share price level. Moreover, the company’s dividend payments have grown at CAGRs of 7.5% and 11.4% over the past three and five years, respectively.
AMT’s total operating revenues for the fiscal third quarter that ended September 30, 2024, increased marginally year-over-year to $2.52 billion. The company’s operating income grew 24.8% from the year-ago quarter to $1.14 billion, and its attributable net income from continuing operations came in at $416.20 million or $0.89 per share for the same period.
In addition, adjusted AFFO and AFFO per share attributable to AMT common stockholders stood at $1.18 billion and $2.52, up 3.3% and 2.9% year-over-year, respectively. Furthermore, its free cash flow rose 16.2% from the prior year’s period to $1.04 billion.
Street expects AMT’s FFO for the fourth quarter (ended December 2024) to increase 36.6% year-over-year to $2.51, while its revenue is estimated to reach $2.51 billion. Furthermore, AMT topped the consensus revenue estimates in three of the trailing four quarters, which is promising.
Shares of AMT have gained 3.4% year-to-date to close the last trading session at $189.55.
AMT’s POWR Ratings reflect this outlook. The stock has a B grade for Growth and Quality. Within the REITs - Diversified industry, it is ranked #11 of 43 stocks. Click here to see AMT’s rating for Value, Momentum, Stability, and Sentiment.
Crown Castle Inc. (CCI)
CCI is a REIT that owns, operates, and leases more than 40,000 cell towers and approximately 90,000 route miles of fiber supporting small cells and fiber solutions across the U.S. market. Its business provides access, including space or capacity, to its shared communications infrastructure via long-term contracts in various forms, including lease, license, sublease, and service agreements.
On December 31, 2024, the company paid its shareholders a quarterly dividend of $1.57 per common share. CCI pays an annual dividend of $6.26, which translates to a yield of 7.12% at the current price level, while its four-year average yield is 4.57%. Moreover, its dividend payouts have grown at CAGRs of 4.7% and 6.5% over the past three and five years, respectively.
CCI’s site rental revenues increased marginally year-over-year for the third quarter that ended September 30, 2024, to $1.59 billion. Its operating income grew 11.9% from the year-ago value to $544 million, while its net income stood at $303 million, up 14.3% year-over-year. The company’s adjusted EBITDA grew 2.7% from the prior year period to $1.08 billion. Also, its adjusted FFO and AFFO per share came in at $801 million and 1.84, representing an increase of 4.4% and 3.9% year-over-year.
Analysts expect CCI’s FFO and revenue for the fiscal year ended December 31, 2024, to reach $6.65 and $6.56 billion, respectively. For the fiscal year 2025, its EPS is forecasted to increase by 0.5% year-over-year to $6.68, while its revenue is estimated to be $6.45 billion.
Over the past year, the REIT has gained 23.6% to close the last trading session at $89.31.
CCI’s stance is reflected in its POWR Ratings. It has a B grade for Quality and is ranked #15 out of 43 stocks in the REITs - Diversified industry. Click here to see the other CCI ratings for Growth, Value, Momentum, Stability, and Sentiment.
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EQIX shares were unchanged in premarket trading Wednesday. Year-to-date, EQIX has declined -1.17%, versus a 4.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
3 REITs Benefiting from the Remote Work Era StockNews.com
