AvalonBay Communities

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First up is AvalonBay Communities ( AVB), a $13.7 billion real estate investment trust that owns close to 50,000 apartments spread across major metropolitan areas from New York to San Francisco. By focusing its portfolio on pricey, in-demand geographic areas, AVB is a more attractive offering than many of its peers, particularly now, when homebuyers are more anxious about dropping a mountain of cash on a home in a pricey region. A strong rental market in AvalonBay's key markets has been boding well for shares of late.

AVB doesn't have the same characteristics that you'd find in a commercial REIT -- super long-term leases and maintenance paid for by the tenant are out of the question, for instance -- but the firm has still managed to churn out a respectable income payout. At their core, after all, REITs are essentially purpose-built income-generation vehicles. AVB's attractive positioning helps make it the best-in-breed among housing REITs.

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Not everyone agrees, of course. The firm's short interest ratio of 10.4 indicates that it would take more than two full weeks of buying pressure at current levels for short sellers to cover their bets against AVB. That hefty pressure against the stock makes it a prime short squeeze candidate; with shares trending higher over the last couple of years, shorts are probably already feeling the pain.

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