Real estate investment trusts have come under pressure lately as homebuilder and subprime stocks weigh on the real estate market. However, these companies have very few similarities, and thus have become cheap for absolutely no reason.

REITs are known for generating consistent revenue and dividends, almost as if the stock was a bond or loan. In fact, stocks like Simon Property Group (NY:SPG) and Boston Properties (NY:BXP) have paid a dividend every quarter for the past decade. With most REITs getting hammered over the past few weeks, this represents a significant buying opportunity.  Here are my favorite real estate investment trusts.

ProLogis (NY:PLD) has been on my radar since it dipped below $60 a couple of weeks ago. This Denver-based REIT is the largest owner of industrial distribution properties, with approximately 450 million square feet of leasable space. Let’s face it, the world is not getting any bigger and these properties - including their rental rates - are only going to increase over time. My only worry is that the company has issued over $11 billion in debt to finance acquisitions, resulting in a total debt to market cap ratio of 39 percent. That’s a little high for my taste. I still recommend buying this stock below $59, and set my one month price target of $63 - a level just above where the stock began its downtrend.

The next company on my list raised guidance for the remainder of the fiscal year - and received an upgrade - just last week, and then proceeded to drop 20 points for, again, no apparent reason. SL Green Realty (NY:SLG) owns and operates some of the top commercial real estate properties in Manhattan, not to mention that many of their lease agreements recently expired. This means their rental rates can increase under the new rental agreements, ultimately equating to more income generated for shareholders. This is an absolute buy at this price. It fell hard and fast from $135, but it’s going to rip and rise right back to that level over the next few weeks. (Another one of my favorite REITs that operates in New York is Vornado Realty Trust (NY:VNO).)

Let’s not forget about those self-storage companies Sovran Storage (NY:SSS) and Public Storage (NY:PSA). These stocks are trading at 52-week lows and boast huge dividends. How can you not be in love with these things? Just like the aforementioned REITs, these companies are picking up cheap real estate during the weak real estate market, and their properties will only increase over time.

Although this next stock is not an REIT, it still operates in the real estate industry and has one of the most absurd short interest ratios in recent history. ZipRealty (NAS:ZIPR), a real estate brokerage firm with an online presence, has an average daily volume of 24,000 shares and 22.4 million shares outstanding. Of the total shares outstanding 1.8 million are currently shorted, and if you do the math, that means it would take over 300 days for the short sellers to cover their shares. On August 8th this company reports earnings and it could be an interesting trading session if their numbers beat the Street.

Filed under: Bargain Basket, Fundamental Research, Sector Watch, Stocks, Time To Buy