High-yield REITs (real estate investment trusts) have proven to be an essential component of a diversified portfolio. These investment vehicles have garnered significant interest and offer a track record of impressive performance and high dividends. In fact, the FTSE Nareit All REITs Index boasts a dividend yield of 4.0%, more than double that of the S&P 500.
So, what exactly is an REIT? REITs are businesses that own, finance, or operate income-producing real estate assets. Their properties can range from office buildings, malls, and apartment complexes to hotels, self-storage facilities, and warehouses. Some REITs also specialize in financing real estate, similar to a mortgage lender.
Investing in high-yield REITs can be an attractive way to supplement income and enjoy the benefits of passive investing. However, it's important to note that not all high-yield REITs are created equal. In this article, we'll explore the 17 best high-yield REITs to consider adding to your portfolio in 2022.
Apollo Commercial Real Estate Finance (NYSE: ARI)
Apollo Commercial Real Estate Finance is a real estate investment trust that focuses on debt securities and commercial real estate-related debts. Their diversified portfolio includes properties in the UK, New York, and the US. With a dividend yield of 10.5%, monitoring this REIT is crucial, considering its past challenges.
SL Green Realty (NYSE: SLG)
SL Green Realty is an REIT based in New York City that specializes in office space and shopping center investments. As the leading office space landlord in NYC, SL Green Realty experienced setbacks due to the pandemic. However, as the situation improves, it's expected to make a strong comeback.
STAG Industrial (NYSE: STAG)
STAG Industrial is an REIT that focuses on acquiring and operating single-tenant industrial properties across the US. With nearly 500 buildings in 39 states, STAG Industrial offers investors a well-diversified portfolio that minimizes risk.
Annaly Capital Management (NYSE: NLY)
Annaly Capital Management is an REIT that invests in agency mortgage-backed securities, non-agency residential mortgage assets, and residential mortgage loans. Their diversified income streams provide a competitive edge, although investors should consider the company's sensitivity to rising interest rates.
AGNC Investment Corp (NYSE: AGNC)
AGNC Investment Corp invests in agency mortgage-backed securities, differentiating it from other REITs. Their hedge portfolio, consisting mainly of intermediate and long-term hedges, contributes to the company's current success.
Omega Healthcare Investors (NYSE: OHI)
Omega Healthcare Investors focuses on healthcare facilities, including nursing homes, assisted living facilities, and retirement housing options. With the aging population, the need for healthcare facilities is set to increase, making OHI a promising investment.
Alexander's Inc. (NYSE: ALX)
Alexander's Inc. specializes in investments within and around New York City. Their portfolio includes retail, residential, and commercial office properties. This year, the company has shown promising earnings growth.
Getty Realty Corp. (NYSE: GTY)
Getty Realty Corp. manages gas stations, convenience stores, car washes, and other automotive businesses. Their holdings are primarily located in the Northeast, with recent expansion into the Midwest.
National Health Investors (NYSE: NHI)
NHI focuses on nursing homes and medical buildings across the country. Despite recent declines in payouts, the average dividend yield remains relatively high. As the healthcare industry addresses pandemic-related issues, NHI is expected to experience growth.
Gladstone Commercial Corporation (NYSE: GOOD)
Gladstone Commercial Corporation holds a diverse range of commercial spaces, including offices, retail spaces, and medical buildings. With stable dividends and increasing value per share, this REIT boasts an attractive payout ratio.
Ryman Hospitality Properties, Inc. (NYSE: RHP)
Ryman Hospitality Properties, Inc. operates a diversified portfolio of properties, primarily in the hospitality and resort industry. Although the company faced challenges during the pandemic, it's on the road to recovery. Investors who are patient may be rewarded handsomely once the dividend returns.
Healthpeak Properties, Inc. (NYSE: PEAK)
Healthpeak Properties, Inc. invests in real estate assets related to the healthcare industry, including long-term care facilities and medical office buildings. With the growing demand for healthcare facilities due to an aging population, PEAK is well-positioned for future growth.
AvalonBay Communities, Inc. (NYSE: AVB)
AvalonBay Communities, Inc. specializes in the development, acquisition, and operation of multifamily properties across the US. Despite setbacks caused by the pandemic, the company is expected to recover, making it an attractive investment at its current discount.
STORE Capital Corporation (NYSE: STOR)
STORE Capital Corporation focuses on acquiring, investing, and managing Single Tenant Operational Real Estate (STORE). With over 2,500 properties in its portfolio, STORE plans to continue acquiring assets. Considering its current discount and solid financials, it's an option worth considering.
STAG Industrial, Inc. (NYSE: STAG)
STAG Industrial, Inc. aims to acquire and manage single-tenant industrial properties across the country. With a diverse portfolio that includes companies like Amazon, STAG is well-positioned to provide investors with growth prospects and attractive dividend yields.
Realty Income Corporation (NYSE: O)
Realty Income Corporation acquires and manages freestanding commercial properties under long-term net lease agreements. Known as "The Monthly Dividend Company," Realty Income offers a stable monthly dividend yield of 4.68%.
UDR, Inc. (NYSE: UDR)
UDR, Inc. specializes in owning, acquiring, developing, and managing apartment complexes nationwide. With a dividend yield of 3.74%, UDR offers investors a source of regular income and potential growth opportunities.
High-yield REITs have become a valuable addition to income investors' portfolios. Offering reliable passive income and strong performance, they're an attractive option for those seeking to diversify their investment strategies. In 2022, yields are expected to remain strong, thanks to the rental market's growth and inflationary periods.
Before investing, it's essential to conduct thorough research and consider the specific attributes and future prospects of each REIT. By combining attractive dividend yields, potential for growth, and solid fundamentals, investors can identify the best high-yield REITs for their portfolios.
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