We recently did a story on stocks that perform well in a rising interest rate environment, a scenario that appears set up to be in play down the road. For the time being, the low interest rate environment should continue to stay in place. One area that performs well in that environment is real estate investment trusts (REITs). But after four straight years of outperforming the S&P 500, is it possible REITs can do it again this year?

While not betting on another year of out performance the REIT, analyst team at J.P. Morgan Chase & Co. (NYSE: JPM) think that a year of total returns at slightly above 10% are not out of the question. They also are comfortable with current valuations, despite solid gains over the past four years. In fact the biggest risk they see is literally bull market risk. This is where portfolio managers would rotate out of REIT names into higher beta, pro-cyclical segments of the stock market. This risk is heightened in their minds as REIT correlations and beta declined considerably in the back half of 2012.

Risk concerns notwithstanding, here is a look at J.P. Morgan’s top REIT picks for 2013. One additional note, while they did not post specific price targets in their report, one may assume that their top picks could achieve better than 10% total return level.

In multifamily housing, the top picks are Essex Property Trust Inc. (NYSE: ESS) and UDR Inc. (NYSE: UDR). Essex is trading today at $152.82 with a 2.90% yield, and the consensus price target is $163. UDR is trading at $24.70 with a 3.60% yield, and the street is at a $26 target.

For regional mall operators, J.P. Morgan likes Simon Property Group Inc. (NYSE: SPG) and CBL & Associates Properties Inc. (NYSE: CBL). Simon is trading today at $159.72 and has a 2.70% yield, with a $173 consensus target. CBL is trading at $21.28, with a 4.20% yield and a Wall St. target of $24.

The top office REIT picks are Kilroy Realty Corp. (NYSE: KRC) and SL Green Realty Corp. (NYSE: SLG). Kilroy recently traded at $48.59, while yielding 2.90%, and it is close to the street target of $50.50. SL Green is trading at $79.33 and yields 1.70%. The Thomson/First Call estimate consensus target is $84.

In the health care sector, the top pick is Healthcare Realty Trust Inc. (NYSE: HR). Trading today at $24.96, the yield is 4.80%, and it is right at the street consensus estimate.

The public storage pick is no surprise due to a small number of national public chains: Public Storage (NYSE: PSA). Trading at $147.96, this dominate name yields 0.70% and has a street target of $146.

Lastly, the selection in the triple net lease field is EPR Properties (NYSE: EPR). Trading today at $46.06, with a strong 6.50% yield, the street target is $49.

Again, while REIT dominance of the S&P 500 may be over, a strengthening economy should help most REITs to post solid years. In addition, J.P. Morgan is looking for continued growth in distributions. It is important to remember that the distributions from REITs, which we quoted as yields, can include return of principal.

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