The stock market has come off its all-time highs, but many stocks are still historically expensive. However, thanks to pressure from rising interest rates and some other temporary headwinds, the real estate sector is full of exciting bargains for long-term investors. Here are two in particular that all trade for low valuations and could prove to be excellent investments for decades to come.

Company (Symbol)

Recent Share Price

Dividend Yield

P/FFO (2018 Midpoint)

Ventas (NYSE:VTR)




Iron Mountain (NYSE:IRM)




Data source: TD Ameritrade. Prices and yield information as of 3/12/18. P/FFO = price-to-funds from operations, based on midpoint of each company's 2018 guidance.

Short-term supply concerns, but an amazing long-term opportunity

Healthcare real estate investment trusts (REITs) have been particularly beaten-down as a result of oversupply worries in the industry. You may have heard that with the aging U.S. population, the need for healthcare will grow dramatically in the coming decades. In fact, the 65-and-up population is expected to roughly double by 2050.

A smiling man holding several 100 dollar bills fanned out in his hand.

Image source: Getty Images.

Well, it looks as if the supply may have outpaced the demand growth, for now, especially in the senior housing industry. Construction of new senior housing properties peaked in 2015, and since that time, occupancy has fallen significantly.

Chart of senior housing occupancy rates since 2011.

Image source: Ventas investor presentation.

However, healthcare real estate remains a solid long-term investment, and Ventas is a smart way to play it. For starters, it may not take long for senior housing demand to surpass supply, as construction has slowed significantly in recent years, and growth in the 80-plus segment of the population is expected to accelerate rapidly after 2020.

Projected growth chart for 80+ population from 2015 through 2023.

Image source: Ventas investor presentation.

Ventas is one of the largest healthcare REITs, with more than 1,200 properties. Just over half of the portfolio is senior housing properties, with major investments in medical offices, life science properties, and hospitals as well. Ventas sees especially strong growth opportunities in medical offices and life science properties, and it plans to concentrate most of its investment efforts into those categories in 2018.

An additional growth catalyst is the potential for consolidation in the industry. Currently, just 12%-15% of healthcare real estate is REIT-owned, as compared with more than 40% of malls and over 50% of hotels. And the most financially flexible REITs, like Ventas, will certainly have an edge.

Since 2001, Ventas has growing its FFO per share, the REIT version of "earnings," at a 10% annualized rate, and shareholders have enjoyed an 8% dividend growth rate. With the future growth potential, and well-covered dividend, there's no reason to believe this can't continue.

A near-monopoly in its core business, with a big growth catalyst

When it comes to records storage and security, there's Iron Mountain and then there's everyone else. Iron Mountain is simply in a league of its own. The company stores 680 million cubic feet of hard-copy records, 1 billion medical images, and 89 million pieces of media, just to name a few of the impressive statistics. Ninety-five percent of the companies in the Fortune 1,000 are among Iron Mountain's 225,000 customers.

As you might imagine, the bulk of Iron Mountain's revenue comes from records storage. However, the company does have a substantial revenue stream from services, 19% of total. For example, you may have seen one of Iron Mountain's mobile document-shredding trucks.

Iron Mountain has a large and geographically diverse business. The company operates more than 1,400 facilities in 53 countries around the world.

The company gets many of the benefits of the self-storage industry without the drawback of high turnover. Specifically, storage facilities tend to have relatively low ongoing expenses when compared with other property types, and while self-storage is generally rented on a month-to-month basis, half of the boxes stored in Iron Mountain's facilities 15 years ago are still there.

Chart of Iron Mountain customer retention.

Image source: Iron Mountain investor presentation.

There are a couple of reasons I'm excited about Iron Mountain as a long-term investment. For one thing, the company still has lots of growth potential in its core business in emerging markets around the world.

More significantly, Iron Mountain has been quietly getting into the data-center business. Data centers currently make up less than 1% of Iron Mountain's revenue, but there is tremendous room for growth in the decades ahead -- as any shareholder of Digital Realty or Equinix can tell you, the growth in the need for secure data storage isn't slowing down. In fact, the company has an ambitious goal of growing its data-center revenue to 7% of the company's total by 2020, and I wouldn't be surprised if this turns out to be just the beginning of Iron Mountain's growth story.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.