W
e're taking a closer look at Public Storage (NYSE:PSA) in the context of top real estate stocks to buy according to billionaires. CBRE Investment Management predicts that global listed real estate will outperform broad equities and offer a differentiated total return compared to private markets by 2025. The firm sees this as the early days of a new upcycle, characterized by accelerating organic earnings, improved supply/demand in various sectors, and abundant access to capital for potential acquisitions.

    CBRE Investment Management believes that a new cycle for listed real estate began in Q4 2023 with the recognition of a pause in rate hikes. The absence of hikes is expected to benefit listed real estate, even without a significant drop in target rates. Historically, real estate has performed well during periods of range-bound long-term yields, such as between 2001-2007 when US 10-year bonds delivered around 4-5% and listed real estate generated double-digit average returns.

    The investment firm expects earnings to accelerate into 2025 across the real estate sectors, with a projected 5% global growth rate, more than double that of 2024. Private-pay senior housing continues to capitalize on strong demographics, while data center growth accelerates with generative AI. Cell towers are recovering from customer churn, and retail and net leases have been performing due to supply/demand and capital costs.

    CBRE Investment Management sees a compelling total return opportunity for REITs, driven by a ~4% dividend yield that remains competitive versus private real estate income. The firm believes listed real estate will prosper amidst moderating central bank target rates and range-bound long-term yields.