The outlook for real estate investment trusts (REITs) has been a bumpy ride this year, with a mixed bag of upgrades and downgrades from analysts. Following a slow month in February with only Maintain and Reiterate ratings, things started to look up again in March, as several factors made REITs more appealing to investors.

One factor is the attractive valuations and yields of many REITs, which have already experienced significant price drops. Another is the possibility that the Federal Reserve may end its rate hikes soon, even if inflation remains above the target rate of 2%. Finally, some analysts may be looking beyond the weaker-than-expected forward guidance many REITs gave for Q1 2023.

In the first half of March, only four REITs received analyst upgrades, including Empire State Realty Trust Inc. (NYSE: ESRT), AGNC Investment Corp. (NASDAQ: AGNC), VICI Properties Inc. (NYSE: VICI), and Apartment Income REIT Corp. (NYSE: AIRC). These four REITs are in different sub-sectors, providing a positive signal for the industry.

Throughout the second half of March, the trend of analysts upgrading REITs continued more actively, with upgraded REITs again from different subsectors. This bodes well for REITs as a whole.

Recent analyst upgrades include Eastgroup Properties Inc. (NYSE: EGP), Vornado Realty Trust (NYSE: VNO), Regency Centers Corp. (NASDAQ: REG), Americold Realty Trust Inc. (NYSE: COLD), Equinix Inc. (NASDAQ: EQIX), and Easterly Government Properties Inc. (NYSE: DEA).

Although analysts’ recommendations should not be the sole basis for investment decisions, the increased positive sentiment from analysts is a good sign for the REIT sector. Investors should always perform their own due diligence before investing in any stock.