Josh Brown's 'Best Stocks in the Market': CBRE Group
Speakers
Josh Brown
— CEO, Ritholtz Wealth Management
Summary
On CNBC's Halftime Report, Josh Brown presented CBRE Group as his 'Best Stocks in the Market' idea, arguing the commercial real estate services company is misunderstood and is transforming toward recurring management and services revenue, with the stock in breakout mode and potentially reaching 200. Jenny then discussed the broader real estate trade, saying the sector is a cheap rebound candidate and highlighting granular REIT opportunities. She favored triple-net lease REITs VICI and Realty Income, healthcare REITs Sabra Healthcare and Ventas, and AI-resistant, low-economic-sensitivity names Melrose Property and Ryman Hospitality Properties.
- Josh Brown named CBRE as a best stock, citing its asset-light model and shift to recurring services.
- Brown said CBRE broke out and could reach $200.
- Jenny argued real estate is the only S&P sector below its 20-year average valuation and is rebounding.
- Jenny said AI and a weak economy are unlikely to destroy all commercial real estate.
- Jenny owns VICI and Realty Income, citing triple-net leases and durable rent collection.
- Jenny owns Sabra Healthcare and Ventas, citing demographic demand and AI-resistant care.
- Jenny also highlighted Melrose Property and Ryman Hospitality Properties as discounted, AI-resistant REITs.
- The panel debated real estate strategy amid a broader sector rebound.
Ideas
CBRE breakout on recurring services transformation.
CBRE is one of the most profitable companies in commercial real estate because it does not own buildings. It has been misunderstood as an old-school office brokerage and transactional business, but it is transforming into a management and services play with more recurring, fee-like revenue from corporate real estate portfolios, tech and IT services, project management, and unifying building operations, workplace experience, and property management. Brown says the stock just broke out and could reach 200.
Real estate sector cheap rebound, AI-resistant.
Real estate is an attractive sector rebound: it was the worst-performing S&P sector last year and is the only one of the 11 S&P sectors not trading above its 20-year average valuation. Investors can use the sector to express both that AI will not fundamentally destroy the business and that a rotten economy or job losses will not destroy it; commercial real estate is not monolithic and offers granular sub-sector opportunities.
Own VICI, Realty Income triple-net resilience.
VICI and Realty Income are triple-net lease REITs with investment-grade tenants and long leases; VICI owns major gaming properties including the Venetian, Caesars, and MGM assets, while Realty Income owns big-box stores. Their rent streams should hold up even if the economy is poor for years, VICI had 100% occupancy during the pandemic, and both trade at discounts with good earnings growth.
Healthcare REITs have AI-proof demand.
Sabra Healthcare and Ventas are healthcare REITs focused on retirement homes and skilled nursing. Demand should persist because people move into these facilities regardless of the economy, and AI cannot replace the care, especially in Sabra's behavioral health niche.
AI-resistant REITs discounted with earnings growth.
Melrose Property and Ryman Hospitality Properties are REITs with no AI risk, relatively little economic sensitivity, a large discount to the market, and decent earnings growth on historical valuation measures; they look cheaper than the broader REIT sector or market.
