VICI and NXRT REITs trade at deep discounts despite strong fundamentals and improving sector outlook.

VICI Properties and NexPoint Residential Trust, two high-quality REITs, are currently trading at significant discounts despite strong financial fundamentals and improving market conditions. VICI, with stable long-term leases and steady cash flow, faces tenant changes due to major casino buyouts but remains well-positioned for growth, trading at 11x forward AFFO. NXRT, impacted by a wave of new apartment supply in sunbelt markets, showed a strong turnaround with better-than-expected leasing and earnings, trading at 65% of net asset value and 11x forward AFFO. Both REITs offer attractive value compared to sector and market multiples, suggesting potential for outsized performance as fundamentals strengthen.