3 REITs with Yields over 6%
Real estate investment trusts (REITs) offer a smart way to invest in real estate because they remove the usual hurdles of buying and managing physical properties.
Let's now focus on three different types of REITs that are not just stable but also profitable, with dividend yields of more than 6%. This positions them as an attractive choice for investors seeking to balance their portfolios with real estate while enjoying regular income streams. It’s a blend of practicality and potential that makes these REITs worth considering.
Alexander’s (NYSE:ALX) stands out in the urban retail real estate sector, with a dividend yield of 8.3%. Their portfolio is predominantly centered around high-end, urban retail properties, with their crown jewel being the 731 Lexington Avenue property in New York City. This focus on premium locations in dense urban settings, such as NYC, aligns with high-value retail and commercial tenants seeking prestigious addresses. Their real estate strategy revolves around owning and managing properties that command higher rent due to their location and tenant profile, contributing to their significant dividend yield. The urban retail focus, especially in upscale markets, presents both opportunities and risks related to urban economic cycles. Their association with Vornado Realty Trust, providing financial and operational synergies, further strengthens their position in the upscale urban real estate market. Alexander’s Inc. has a strong portfolio of tenants, particularly in its high-end, urban retail properties. Some of their major tenants include well-known companies like Bloomberg, The Home Depot (NYSE:HD) and Costco (NASDAQ:HD).
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Getty Realty (NYSE:GTY), with a dividend yield of 6%, is a specialized real estate investment trust focusing on gasoline stations and convenience stores. Their properties are strategically situated in high-traffic areas and prominent metropolitan markets, vital for businesses that rely on high customer footfall. The company’s leasing strategy, predominantly based on long-term, triple-net leases, translates into stable and predictable income streams while minimizing management and maintenance responsibilities. Their niche specialization in gas stations and convenience stores means they cater to a sector with unique real estate needs, including smaller footprints, accessibility, and visibility. This specialization allows Getty Realty to build and maintain a diverse and resilient tenant base, contributing to its steady dividend yield.
CBL Properties (NYSE:CBL) offers a dividend yield of 6% and specializes in retail real estate, primarily focusing on shopping malls and centers. Their properties are predominantly located in the Southeast and Midwest regions of the U.S. CBL’s strategic approach involves managing large-scale, market-dominant shopping centers that often serve as primary retail hubs in their areas. These properties typically feature a mix of national anchor stores and local retailers, creating a diversified tenant base. Recognizing the evolving landscape of retail, CBL is transitioning some of their properties into multi-use complexes, integrating retail with entertainment, dining, and residential spaces. This adaptive strategy is aimed at enhancing the consumer experience and sustaining foot traffic, crucial in the face of the challenges confronting traditional retail spaces. Their focus on reinventing and diversifying shopping centers underlines their commitment to staying relevant and profitable in the dynamic retail sector.
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