Jefferies analyst Jonathan Petersen emerges from a major industry conference with upgraded expectations for real estate investment trusts as they enter the second half of 2026. Speaking to management teams across property types, Petersen emphasized a prevailing tone of confidence - managements reported limited concerns about supply and broadly described the economy as resilient despite geopolitical noise.
Across the conversations Petersen flagged strong transaction volume, particularly in senior housing, retail net lease and shopping centers. He also noted that residential and self-storage sectors are performing better than many had expected even in an environment of muted population growth.
Top REIT picks highlighted by Jefferies
Petersen set out a list of 10 REITs he views favorably, citing deal activity, development pipelines and operational metrics that suggest continued momentum across segments. Below is a sector-by-sector review, with the facts management provided and the reported first-quarter 2026 results where noted.
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Agree Realty Corporation (NYSE:ADC) - Management believes the shares are meaningfully undervalued and has supported that view through insider purchases, aiming for a valuation multiple of roughly 20x. The firm emphasized a strong cost of capital position and indicated it does not require private capital partnerships, given the relationship-driven nature of its net lease business where average deal sizes are about $5 million. Pipelines are expected to accelerate beyond the first quarter’s $18 million of commencements as weather-related delays normalize.
Agree Realty reported first-quarter 2026 revenue of $200.81 million, beating expectations. The company also announced a new at-the-market equity program permitting the sale of up to $1.75 billion of common stock.
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Anchor Health Properties (NYSE:AHR) - The company is expanding its investment pipeline while adhering to conservative underwriting, with more sellers entering the market. Petersen specifically addressed concerns about Trilogy’s ability to raise average daily rates on skilled beds, noting that Trilogy can influence operator revenue mix by shifting toward Medicare Advantage from Medicaid. Petersen described Trilogy as a useful resource for helping smaller regional operators refine their strategies.
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COPT Defense Properties (NYSE:CDP) - Management described Space Command as a less immediate tailwind than previously thought, and is concentrating efforts on the Golden Dome for existing Huntsville developments. At the same time, rising emphasis on cybersecurity and drone operations is expected to generate incremental demand in Northern Virginia and Navy Support markets. Data center projects continue to face power constraints, which limits near-term development upside.
COPT reported first-quarter 2026 revenue of $200.64 million, ahead of analyst forecasts, and declared a quarterly dividend of $0.32 per common share.
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Digital Realty Trust (NYSE:DLR) - Management described a meaningful acceleration in enterprise colocation leasing, setting a target of $100 million in quarterly leasing for four consecutive quarters. Recent bookings measured approximately $98 million and $96 million in back-to-back quarters, approaching that goal. Development costs have risen materially - from $10-11 million per megawatt historically to about $14 million - and management views this higher capital intensity as a structural barrier for smaller developers.
Following the strength tied to AI-related demand, several firms increased price targets on Digital Realty, though HSBC downgraded the stock to Hold from Buy on valuation grounds.
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Equinix (NASDAQ:EQIX) - Equinix is positioned to capture AI-related infrastructure demand, with four of the five leading neocloud providers deployed across more than 110 nodes within its network. Management reiterated a target of 10% adjusted funds from operations per share growth. Average rack density sits near 5 kilowatts per rack, and the company stated it can support more than 100 kilowatts per rack at roughly 100 of its 280-plus data center sites.
Equinix also disclosed the planned retirement of Chief Accounting Officer Simon Miller effective July 31, 2026. Stifel and Bernstein SocGen Group reiterated positive ratings on the company, citing its exposure to AI infrastructure and interconnection growth.
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Extra Space Storage (NYSE:EXR) - Same-store fundamentals remain steady; occupancy reached 94.2% in May, unchanged year-over-year. The non-renewal of Los Angeles price gouging restrictions should provide a modest tailwind to same-store revenue growth this year in the order of 10 to 20 basis points. Competitive dynamics favor Extra Space on asset management flows as well: over the past two years 56 owners shifted from CubeSmart to Extra Space’s asset management, compared with nine moving the other direction.
Extra Space reported first-quarter 2026 revenue of $856 million, beating expectations, and declared a second-quarter dividend of $1.62 per share.
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EastGroup Properties (NYSE:EGP) - Development economics remain attractive, with development yields around 7% versus exit cap rates near 5%. Management indicated that roughly half of development leasing activity is being driven by data center-related users, particularly downstream suppliers. The company views current entitlement timelines and limited land availability as structural checks on overbuilding.
EastGroup posted first-quarter 2026 earnings per share well above analyst estimates, declared a quarterly dividend of $1.55 per share, and reported its portfolio was 96.5% leased in early second-quarter measurement.
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First Industrial Realty Trust (NYSE:FR) - Demand from advanced manufacturing and data center users continues to support incremental absorption in industrial markets. Management expects rent growth to be flat in Southern California and in a 0-5% range across most markets, while select submarkets such as Nashville and Dallas are expected to outperform at greater than 5% growth. A 7.7-year weighted average lease term is keeping spreads elevated by reducing exposure to peak rent rollovers.
First Industrial reported first-quarter 2026 revenue of $194.83 million, substantially beating expectations. In response to results, Truist Securities raised its price target on the shares.
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LXP Industrial Trust (NYSE:LXP) - A recent Phoenix acquisition is expected to contribute roughly $9 million to 2026 results and drives a net guidance uplift of 5.5 cents. Management highlighted that data center-driven leasing is becoming a material tailwind across markets, notably in Columbus and Phoenix. Big-box vacancy across the company's footprint is effectively zero.
LXP reported first-quarter 2026 adjusted funds from operations of $0.80 per diluted share, a 2.6% increase from the prior year. Citizens reiterated a Market Outperform rating on the stock.
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Public Storage (NYSE:PSA) - Move-in rates have improved sequentially, declining only 0.2% quarter-to-date compared with a negative 2.4% in the first quarter. Customer churn remains better than expectations and is supporting occupancy. The expiration of price gouging restrictions in Los Angeles should reduce the same-store revenue growth headwind by 20 to 60 basis points from a prior 80 basis point drag.
Public Storage reported first-quarter 2026 earnings per share above analyst expectations, although revenue fell short of forecasts.
What these signals mean
Petersen’s read from the conference suggests pockets of sustained demand - from healthcare and senior housing to net lease retail and industrial spaces that serve advanced manufacturing and data center supply chains. At the same time, structural frictions such as higher capital intensity for data center development and site-specific constraints like power availability remain relevant constraints.
Several of the named companies reported first-quarter results that exceeded expectations and announced shareholder-friendly actions such as dividends or equity programs. That combination of deal activity and financial outperformance underpins Jefferies’ selections.
Methodological note
The above reflects Jefferies analyst Jonathan Petersen’s conversations with REIT management teams and the companies’ reported first-quarter 2026 results as described by management and the firms themselves. The list focuses on observable metrics such as leasing velocity, development economics, occupancy and reported revenue or FFO figures.