4 stocks to watch: real estate – exploring a sector that rewards long-term thinking

Real estate remains in recovery mode, but analysts expect a resurgence. In this guide, we’ll be examining how, where and when that could happen.

In this article, we’re looking at:

• Who stands to benefit from the brick-and-mortar vs ecommerce retail war
• Which English company is attracting interest from the world’s largest commercial property investor
• Why one real estate investment trust could be priced as a bargain despite impressive results
• Which company recently shocked analysts (in a good way)

Starwood Property Trust - outperforming the real estate market (and itself)

What it does

With a market cap of just under $7bn^[1] , it’s the largest commercial mortgage real estate investment trust in the United States and one of the country’s biggest owners of rental homes. Starwood is diversified across many property sectors, from commercial, both traditional and distressed, to residential and infrastructure.

Starwood lends, buys, develops and manages properties as well as property debt, while also offering related services via subsidiaries including Waypoint Residential.

Why it matters

The real estate market remains in recovery mode. It’s slowly growing, and analysts are cautiously optimistic about the future. But headline-grabbing growth is rare and unexpected. Which is why Starwood’s recent results caught the eye.

Starwood’s Q2 2025 performance certainly surpassed expectations. The firm announced earnings per share of $0.43, 7.5% above forecast. Revenue was particularly strong, more than double the forecast of just under $200 million, reaching $444.28 million^[2].

The narrative around real estate is slow and steady growth against some challenging headwinds. So, these results stand out for just how far above expectations they actually were.

What to watch

In October 2025, Starwood announced it was raising $500 million by issuing bonds^[2] . They plan to use this money mainly for green and social projects, but if not all of it is used for that, some will go toward paying off debt.

If you believe America’s largest commercial real estate investment trust is well-positioned to profit from an evolving real estate market without being slowed down by sector headwinds, this move should be grabbing your attention.

Raising revenue in a rapid style like this points to a company confident in its ability to grow and grasp opportunities without hampering balance sheet and cash flow flexibility.

Big Yellow - an oracle for economic trends is attracting attention

What it does

Big Yellow is technically a real estate investment trust (REIT), although to most consumers in the UK, it’s an iconic big box storage brand. Operating 104 sites across the UK and with a market cap of £2.21bn^[3] ($2.95bn), it’s by no means a giant of the global real estate sector. However, it remains one to watch.

Why it matters

Self-storage and storage more generally may not make for thrill-a-minute analysis, but activity in the sector can point to and even foreshadow broader economic trends. By digging into storage data, it’s possible to mine business expansion trends, consumer habits, residential mobility (higher storage occupancy points to a trend for downsizing) and other interesting titbits.

Big Yellow has been a beneficiary of the demand for storage driven by the Covid-19 era online retail boom. It’s also well placed to benefit from the general future growth of the sector.

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So let’s take a look. Is storage a growth sector worth your attention?

The self-storage industry in the UK has experienced notable growth in the past year, with annual turnover exceeding £1.2 billion and a 7.2% increase in available storage space, now reaching 64.3 million sq ft. Rental returns have risen by 6%, averaging £29.13 per square foot, while storage space per person has increased slightly.

A big driver of recent profit growth in the sector is AI automation, allowing storage businesses to manage security, bookings, billing and even logistics without investing in human capital. A recent report from a trade body said that 68% of businesses now actively use AI, which is a substantial rise from 25% last year^[4].

What to watch

In the second week of October 2025, it was reported that Big Yellow shares hit their highest point in 12 months and the company enjoyed its largest ever one-day gain^[5]. That’s because Blackstone, the world’s biggest commercial property investor, confirmed it was considering a cash offer for them.

With a healthy dividend yield of 4.13%^[3] and interest from the world’s largest commercial property investor, does Big Yellow have headroom for more growth? Or have the markets priced it in already ahead of any sale to Blackstone?

Blackstone

What it does

Aside from talking about acquiring iconic UK storage businesses, Blackstone has interests in a variety of sectors, including real estate.

Blackstone is the world’s biggest and most successful alternative investment management firm. It oversees over $1.2 trillion^[6] in assets across various niche markets, including real estate and infrastructure. Core to its real estate strategy is opportunism, identifying undermanaged, well-located assets across the world and then establishing businesses to manage them.

Why it matters

You could say that Blackstone epitomises the real estate sector, posting impressive, steady growth over the long term. However, in terms of the scale of its growth, Blackstone is an outlier, outperforming even the S&P 500 in the ten years to 2025, with an average growth rate of 24.4% and total growth for the decade of 780%^[6].

What to watch

Analysts generally expect Blackstone to withstand economic headwinds and market volatility, continuing to perform steadily. But share price growth has slowed slightly in recent months. Could this be an opportunity for a value buy?

Brixmor Property Group

What it does

Brixmor Property Group is a real estate investment trust (REIT) that focuses on retail properties, mainly shopping malls. It generates steady rental income and long-term growth by owning, managing, and improving retail real estate across the US.

Why it matters:

Analysts have been watching Brixmor with interest for years to gauge the fortunes of brick-and-mortar real estate as it fends off the existential threat of online shopping. Stock is up 139% over the last five years^[7] . That’s impressive for the real estate sector.

What to watch:

Despite solid longer-term performance, the year-to-date share price growth hasn’t been as strong, declining by 1.89%^[7] , despite strong fundamentals. Disciplined investors may well see this as a value buy opportunity if they think the stock is currently undervalued due to broader sentiments, rather than as a reflection of Brixmor’s actual performance.

Savvy traders feeling less optimistic about Brixmor’s fortunes might see a more generalised opportunity to bet against the real estate sector.

The bottom line

The more things change, the more they stay the same. AI, the remote-working revolution, ecommerce growth and high interest rates have all disrupted the sector to varying degrees. But real estate is still based on long cycles, responding to economic fundamentals in a relatively predictable manner. And it’s still a fairly reliable store of wealth for long-term investors.

The future is exciting. We’re living longer, using more data and demanding more physical storage than ever before. Each of these trends presents opportunities for the sector and those investing in it. Many analysts think we’re in a cyclical dip, so now could be the time to take a position on a well-priced stock, REIT or even the sector as a whole through an ETF.