Invest in Top 3 Solid Real Estate Shares for Steady Earnings through Passive Income
In the dynamic world of real estate investment, three prominent Real Estate Investment Trusts (REITs) - Federal Realty Investment Trust, Essex Property Trust, and Realty Income - have distinguished themselves by their focus on growth, dividend stability, and strategic investments.
Federal Realty Investment Trust
Federal Realty, based in Rockville, Maryland, has built a reputation for selling properties with limited growth potential to fund new investments in high-quality properties. This strategy has allowed the company to own the best retail-oriented properties in areas with the best demographics, such as first-ring suburbs of strategically selected metro markets.
Recently, Federal Realty sold a 181,000-square-foot portfolio of retail properties on Hollywood Boulevard for $69 million, as well as a 108-unit residential property for $74 million. The funds from these sales were used to buy two dominant open-air retail centers in one of the most affluent and fastest-growing submarkets of Kansas City for $289 million.
Federal Realty's focus on owning high-quality mixed-use properties and open-air shopping centers has paid off. Since 2005, the company has increased its Funds from Operations (FFO) per share by more than 134%, while two of its larger peers have delivered FFO growth rates of 25% and -14% during the same period. The REIT has also increased its dividend for a sector-leading 58 consecutive years.
Essex Property Trust
Essex Property Trust, headquartered in San Mateo, California, maintains a conservative dividend payout ratio and a strong balance sheet. Since becoming a public company, Essex has increased its dividend for 31 consecutive years, with a cumulative 516% increase in dividend since its listing.
Essex Property's core funds from operations (FFO) increased by 276% over the past 20 years, and its same-property net operating income has grown by 126% during the same period. The residential REIT focused solely on the West Coast has also raised its dividend at more than double the average pace of its peers.
Realty Income
Realty Income, located in Scottsdale, Arizona, focuses on investing in properties that produce very stable rental income. The company owns retail, industrial, gaming, and other properties secured by long-term net leases with many of the world's leading companies.
Realty Income has grown by using its elite balance sheet to steadily acquire more income-generating properties. The REIT has raised the dividend for 111 consecutive quarters and more than 30 straight years. Its adjusted FFO per share has increased at a more than 5% annual rate, supporting a 4.2% compound annual dividend growth.
These three REITs - Federal Realty Investment Trust, Essex Property Trust, and Realty Income - demonstrate that a focus on growth, dividend stability, and strategic investments can lead to long-term success in the real estate industry.
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