If you're an investor looking for something a little more spicy than simple residential real estate investing, you can choose from a whole world of commercial real estate stocks. Some commercial investors manage nothing but offices or retail properties, while others focus on niches like mixed-use properties.
Residential real estate stocks are great for buying and holding, but they generally don't offer much innovation or excitement. Choosing commercial real estate stocks can provide exposure to up-and-coming industries that are primed for major growth or are already growing exponentially.
Most commercial real estate stocks are structured as real estate investment trusts (REITs), which usually pay dividends. This makes them attractive to income investors. You can also reinvest dividends to buy more shares of the REIT, further bolstering your returns.
Five best commercial real estate stocks to buy in 2025
Here are a few commercial real estate stocks to keep an eye on this year.
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Kilroy Realty (NYSE:KRC) | $4.8 billion | 5.28% | Office REITs |
| Realty Income (NYSE:O) | $54.8 billion | 5.34% | Retail REITs |
| Prologis (NYSE:PLD) | $117.4 billion | 3.16% | Industrial REITs |
| Alexandria Real Estate Equities (NYSE:ARE) | $13.4 billion | 6.82% | Health Care REITs |
| Simon Property Group (NYSE:SPG) | $58.1 billion | 4.74% | Retail REITs |
1. Kilroy Realty
NYSE: KRC
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NYSE: O
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If you're interested in building a diverse real estate portfolio but aren't sure where to start, a diversified REIT may be the answer. Realty Income (O -0.38%) is a reliable player in this arena.
Its portfolio includes a variety of commercial properties across all 50 states and Puerto Rico, as well as a small presence in several international markets. Its properties are often occupied by major retail chains -- think pharmacies, convenience stores, dollar stores, and warehouse clubs -- that tend to be reliable tenants.
NYSE: PLD
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NYSE: ARE
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Alexandria has built a solid base for long-term stability with occupancy rates for operating properties of almost 94.5% as of Dec. 31, 2024, plus a weighted-average remaining lease term for all tenants of 9.3 years. It leases space to companies such as Eli Lilly (LLY +0.57%), Moderna (MRNA +1.79%), Novartis (NVS -0.87%), Merck (MRK +0.36%), and Uber (UBER -0.57%).
Approximately 92% of its leases are triple net leases, which require the tenant to cover real estate taxes, insurance, utilities, repairs, maintenance, common area expenses, and other operating expenses. The lease terms reduce the company's overall cost of doing business.
5. Simon Property Group
NYSE: SPG
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As one of the world's largest operators of mall properties, Simon Property Group (SPG -0.35%) is constantly looking for new ways to reinvest in and add additional value to its older properties. In 2024, it completed 15 redevelopment projects in the United States and continued to add mixed-use components, including 320 hotel and residential units.
Although the REIT holds substantial debt, it's largely due to a huge building boom in mixed-use properties that include retail, hotel, dining, and event space. The boom has allowed Simon Property to execute a record number of leases in 2024 -- 5,500 that totaled over 21 million square feet -- which should help reduce debt.
Adding more components to traditional retail should continue to bring value to investors as consumers are drawn to the enhanced properties.
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The bottom line
Whether you're looking for more warehousing, retail, or office exposure, there are plenty of opportunities to add stable real estate investments to your portfolio.
As a commercial real estate stock investor, you can do a lot more than simply invest in a place for someone to live. From real estate groups that lease exclusively to biotech to warehouse REITs that move e-commerce closer to home, there are plenty of opportunities to invest in commercial real estate stocks.
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