You’re an investor who’s looking at retirement in just a few short years. You want to transition from growth investments to income-producing instruments. You want solid investments you can hang on to for several years, but you’re looking for a higher yield than what’s available with bank certificates of deposit or U.S. Treasuries. There are certainly good stocks trading on the exchanges that pay decent dividends, but you’re looking for the stability of real estate.
If this sounds like you, here are three real estate investment trusts (REITs) that will provide you with reliable passive income for potentially years to come.
Camden Property Trust (NYSE:CPT): $132.32 on Sept. 13
Camden is a Houston-based company that focuses on multifamily housing. It owns 171 properties with 58,425 units. For 13 consecutive years, this 1,600-employee company has been on the list of Fortune magazine’s 100 Best Companies to Work For. It currently ranks No. 18 on the list. Camden is an S&P 500 company that provides a dividend yield of 2.74%.
In Camden’s 2021 annual report, Chairman and CEO Richard J. Campo and Executive Vice Chairman and President D. Keith Oden wrote:
“2021 was a great year, but we think the best is yet to come. Our outlook for 2022 is optimistic, and we believe this may prove to be our best year on record for both earnings and same-property growth. We anticipate 2022 same-property revenue growth of 8.75%, expense growth of 3% and NOI [net operating income] growth of 12% at the midpoint of our guidance range. Phoenix will likely be one of our top markets again in 2022, and we expect to achieve double-digit revenue growth in other markets such as Southeast Florida, Tampa and Orlando.
“Fundamentals for our business remain strong, and favorable demographic trends continue to drive demand for apartment living. The pace of multifamily completions has been steady over the past few years, but it has been met by ample demand for rental housing, allowing new supply to be sufficiently absorbed in most markets. We expect the levels of new supply being delivered in our markets in 2022 will be similar to those observed in 2021 but will still result in a healthy balance of supply and demand. We believe these economic and demographic factors, along with the greater flexibility provided by renting versus home buying, will continue to drive demand for Camden’s multifamily product.”
Realty Income Corporation (NYSE:O): $65.91 on Sept. 13
Realty Income has its main office in San Diego. The 53-year-old company owns 11,400 properties in long-term lease agreements with commercial clients. This S&P 500 REIT currently enjoys a 4.45% dividend yield. In fact, Realty Income touts itself as “The Monthly Dividend Company,” so it should especially catch the attention of retirees who are looking for regular monthly income.
Realty Income is part of the Dividend Aristocrats list, which consists of S&P 500 members that have paid and increased dividends for at least 25 years. The Realty Income website states that the company has experienced:
- A 15.1% compound annual total return since its 1994 public listing
- A 4.4% compound dividend annual growth rate
- 99 consecutive quarterly dividend increases – Realty Income has increased its dividend 116 times since going public in 1994
Alexandria Real Estate Equities (NYSE:ARE) $153.73 on Sept. 13
Alexandria is based in Pasadena, California. Since 1994 this REIT has established a large market presence in places such as Boston, San Francisco, New York City, San Diego, Seattle, Maryland and the Research Triangle area of North Carolina. It’s the oldest owner of life science, technology and ag-tech office buildings. Alexandria currently provides a dividend yield of 3.07%.
In the company overview on its website (www.ARE.com), representatives of the company wrote:
“Alexandria has a longstanding and proven track record of developing Class A properties clustered in urban life science, agtech and technology campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity and success.
“Alexandria also provides strategic capital to transformative life science, agtech and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns and greater long-term asset value.”
Looking for high dividend yields without the price volatility?
Real estate is one of the most reliable sources of recurring passive income, but publicly-traded REITs are just one option for gaining access to this income-producing asset class. Check out Benzinga's coverage on private market real estate and find more ways to add cash flow to your portfolio without having to time the market or fall victim to wild price swings.
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