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) | $55.1 billion | 5.32% | Retail REITs |
| Prologis (NYSE:PLD) | $117.0 billion | 3.17% | Industrial REITs |
| Alexandria Real Estate Equities (NYSE:ARE) | $13.5 billion | 6.79% | Health Care REITs |
| Simon Property Group (NYSE:SPG) | $58.8 billion | 4.69% | Retail REITs |
1. Kilroy Realty
NYSE: KRC
Key Data Points
Office REITs have taken a bit of a beating since the work-from-home trend started. Nevertheless, Kilroy Realty is still finding ways to remain profitable and grow its income.
Kilroy Realty (KRC -0.05%) is in some of the country's hottest markets, with 118 total office buildings in five markets -- Austin, San Diego, Los Angeles, San Francisco, and Seattle -- and housing tenants in more than 16 million square feet of rental space. It's also somewhat diversified, with three residential properties containing a total of 1,001 units.
Kilroy Realty's largest tenants include:
- General Motors' (GM +1.04%) Cruise LLC
- Stripe
- Adobe (ADBE -0.97%)
- Salesforce (CRM -2.57%)
- Okta (OKTA -2.69%)
- DoorDash (DASH -3.69%)
- Netflix (NFLX -10.00%)
That's a solid base of companies to provide stable income, even in these days of lower office occupancy. Kilroy's dividends increased steadily between 2015 and 2023, from $1.36 to $2.16, an increase of more than 58% in just eight years. Kilroy has held its dividend at $2.16 since 2023.
2. Realty Income
NYSE: O
Key Data Points
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 +0.40%) 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
Key Data Points
NYSE: ARE
Key Data Points
NYSE: SPG
Key Data Points
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.
FAQ
About the Author
