10 REITs That Crushed the Market in 2010

BOSTON (TheStreet) -- If the property market is in a slump, why have some real estate investment trusts, profiled below and on the following pages, doubled or tripled?

Ask hedge-fund manager Bill Ackman of Pershing Square Capital Management, who has been buying real-estate stocks. He says they represent the best value in investing.

The Dow Jones Equity All REIT Total Return Index has risen 28% this year, twice that of the benchmark S&P 500 Index. That's on top of a 33% advance in 2009.

Some real-estate stocks have risen multiples of the index. Newcastle Investment ( NCT) and Glimcher Realty Trust ( GRT) are the two best-performing REITs this year as investors hunt for dividends, put off by record-low bond yields. Many of these stocks are yielding more than the 3.39% investors can get with 10-year Treasury bonds.

Among the key points Ackman highlighted in a November presentation, which carried the tongue-in-cheek title "How To Make a Fortune," is that real estate is at the lowest level in at least a generation, with a large number of distressed transactions and favorable long-term demand.

Ackman's bet on real estate has already paid off for Pershing Square, which invested in General Growth Properties ( GGP) when the stock traded for $1 after the mall operator rejected a buyout offer from Simon Property Group ( SPG) and sought bankruptcy protection. General Growth Properties now trades at $15 after emerging from Chapter 11.

Despite General Growth Properties' comeback this year, the stock didn't manage to crack the list of the 10 best-performing REITs for 2010.

Read on to see which real-estate stocks trading on the New York Stock Exchange and Nasdaq returned the most to investors this year.


10. Gyrodyne Co. of America ( GYRO)

Company Profile: Gyrodyne leases industrial and commercial real estate to unrelated diversified entities. Properties are located in Long Island and Cortlandt Manor, New York.

Shares of the company doubled in July after the Court of Claims of the State of New York issued an opinion requiring the state to pay Gyrodyne nearly $100 million for land appropriated in 2005 in addition to $26 million paid for the property at the time of the taking.

Share Price: $79.62 (Dec. 29)

Current Yield: Gyrodyne doesn't currently pay a dividend.

2010 Total Return: 92%

Analyst Consensus: There is no analyst coverage of Gyrodyne.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

9. Felcor Lodging Trust ( FCH)

Company Profile: Felcor owns and manages 83 hotels and resorts in the U.S. and Canada.

Share Price: $7.30 (Dec. 29)

Current Yield: Felcor Lodging doesn't currently pay a dividend. The stock yielded about 4% before the market collapse in 2008 forced the elimination of dividend payments.

2010 Total Return: 99%

Analyst Consensus: Five analysts have a "hold" rating on Felcor. One research shop has a "buy" rating on shares. No analyst recommends selling the stock.


8. Ashford Hospitality Trust ( AHT)

Company Profile: Ashford Hospitality Trust is a REIT with a portfolio of direct hotel investments, including brands like Embassy Suites, Marriott, Hilton and Residence Inn.

Share Price: $9.62 (Dec. 29)

Current Yield: Ashford Hospitality doesn't currently pay a dividend. Before the market collapse in 2008, Ashford yielded roughly 5%.

2010 Total Return: 104%

Analyst Consensus: Four of five analysts covering Ashford Hospitality have a "hold" rating on the stock. The only other research firm following the company has a "buy" rating on shares. No analyst recommends selling the stock.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

7. One Liberty Properties ( OLP)

Company Profile: One Liberty Properties owns and manages a geographically diversified portfolio of retail, industrial, office and other properties under long-term leases.

Share Price: $17.36 (Dec. 29)

Current Yield: 7.6%

2010 Total Return: 113%

Analyst Consensus: There is no analyst coverage of One Liberty Properties.


6. Hersha Hospitality Trust ( HT)

Company Profile: Hersha Hospitality Trust invests in institutional-grade hotels in central business districts, primary suburban office markets and stable destination and secondary markets. Properties are located in the Northeast and the West Coast.

Share Price: $6.55 (Dec. 29)

Current Yield: 3.1%

2010 Total Return: 114%

Analyst Consensus: Even with a total return of 114%, Hersha is still loved by analysts. Six researchers recommend buying the stock, while two others suggest that investors continue holding shares. Only one research firm has a "sell" rating on Hersha.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

5. Strategic Hotels & Resorts ( BEE)

Company Profile: Strategic Hotels & Resorts is the owner and asset manager of high-end hotels and resorts. The company's portfolio is currently made up of 16 properties totaling 7,630 rooms, according to its Web site.

Share Price: $5.19 (Dec. 29)

Current Yield: Strategic Hotels & Resorts doesn't currently pay a dividend. The last dividend payment in September 2008 yielded 2.7% before the company eliminated payments.

2010 Total Return: 181%

Analyst Consensus: Two of the seven analysts following Strategic Hotels recommend that investors buy shares of the REIT. The other five researchers have a "hold" rating on the company's stock. No analyst recommends selling the stock.


4. iStar Financial ( SFI)

Company Profile: iStar Financial is a diversified financial-services REIT with two primary lines of business: lending and corporate tenant leasing. The company has completed over $34 billion of commercial real estate investments over the past 15 years, according to its Web site.

Share Price: $7.75 (Dec. 29)

Current Yield: iStar Financial doesn't currently pay a dividend. The company last paid a dividend in July 2008, which yielded 8%.

2010 Total Return: 199%

Analyst Consensus: Four of the five analysts covering iStar say investors should hold on to shares. The other analyst has a "buy" rating on the stock. No analyst recommends selling the stock.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

3. Arbor Realty Trust ( ABR)

Company Profile: Arbor Realty Trust is a REIT that invests in a diversified portfolio of bridge and mezzanine loans, preferred-equity investments, mortgage-related securities and other real-estate-related assets.

Share Price: $5.90 (Dec. 29)

Current Yield: Arbor Realty Trust doesn't currently pay a dividend. Shares yielded roughly 6% before the company eliminated dividend payments during the height of the financial crisis.

2010 Total Return: 201%

Analyst Consensus: The lone analyst covering Arbor Realty says investors should continue to hold the stock.


2. Glimcher Realty Trust ( GRT)

Company Profile: As a developer of malls, Glimcher Realty Trust owns or manages 27 properties in 14 states with about 21 million square feet of leasable space, according to the company's Web site.

Share Price: $8.13 (Dec. 29)

Current Yield: 4.9%

2010 Total Return: 216%

Analyst Consensus: Despite the big run-up, two research firms covering the company say Glimcher is a "buy." Another three analysts say investors should hold shares, while one firm argues that the stock is a "sell."

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

1. Newcastle Investment Corp. ( NCT)

Company Profile: Newcastle Investment owns a diversified portfolio of debt predominantly secured by commercial and residential real estate. As of Sept. 30, Newcastle's investment portfolio consisted primarily of $3.1 billion, $900 million and $700 million of commercial, residential and corporate debt, respectively.

Share Price: $6.92 (Dec. 29)

Current Yield: Newcastle Investment doesn't currently pay a dividend. The company slashed its dividend in early 2008 before eliminating payments altogether. Prior to canceling the dividend, the stock yielded about 5%.

2010 Total Return: 230%

Analyst Consensus: Two analysts covering Newcastle are split between recommending the stock as a "buy" and "hold." No research firm recommends selling shares.

-- Written by Robert Holmes in Boston.

>To see these stocks in action, visit the 10 REITs That Crushed the Market portfolio on Stockpickr.

>To contact the writer of this article, click here: Robert Holmes.

>To follow Robert Holmes on Twitter, go to http://twitter.com/RobTheStreet.

>To submit a news tip, send an email to: tips@thestreet.com.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

More from Personal Finance

The Best Investment Advice? Stay Diversified

The Best Investment Advice? Stay Diversified

Use This Simple Investing Strategy to Stay Ahead in a Rollercoaster Stock Market

Use This Simple Investing Strategy to Stay Ahead in a Rollercoaster Stock Market

5 Most Ridiculous Royal Wedding Memorabilia Items

5 Most Ridiculous Royal Wedding Memorabilia Items

7 Ways Your Financial Adviser Should Help You Survive Rising Interest Rates

7 Ways Your Financial Adviser Should Help You Survive Rising Interest Rates

Five Signs You're Getting a Raw Deal From Your Financial Adviser

Five Signs You're Getting a Raw Deal From Your Financial Adviser