Dividends Premium REITs: March 2025

Low investor expectations have opened the door to big returns for best in class REITs this year.

A warm welcome to the March issue of Dividends Premium REITs!

This month features the full coverage universe REIT Sheet Rater, with advice and analysis for all 83 REITs I track. My comments highlight what you need to know about the latest earnings results and guidance updates for each company.

Like the Abbreviated version I post in between earnings reporting season, you’ll also see Dream Buy prices, Take Profits prices and ex-dividend dates when you’ll have to own each stock to collect its next dividend.

This month’s top fresh money buy for conservative investors is a fast growing self-storage REIT that’s not just surviving but thriving in a sector downturn that’s starting to claim weaker rivals. My more aggressive pick is a suddenly cheap grocery-anchored retail mall blue chip. Both offer growing yields more than three times popular S&P 500 ETFs and are competitive with most bond funds as well.

The First Rate REITs table highlights all of my top recommendations. And I also highlight the results for the REITs on that list that had not reported as of the February issue.

Have a question? Then please take advantage of your access to Dividends Roundtable I host of the Discord application. Thanks for reading!.—RC

REITs: Challenging Environment But Expectations Easy to Beat

The Real Estate SPDR ETF (XLRE) began March by moving higher. But after the first week it started drifting lower, as investors became spooked by concerns about the economy and higher for longer interest rates. And as a result, the ETF is now up just 2.83 percent so far in 2025.

That’s still ahead of the SPDR S&P 500 ETF Trust (SPY), which has been dragged lower by the 10 Big Tech stocks that dominate the benchmark index. And the REIT ETF is roughly even with the iShares Select Dividend ETF (DVY), often used as a measuring stick for dividend focused stock portfolios.

But what was starting to look like a sector-wide rally earlier this year now appears to be taking a breather. A handful of REITs are still sitting on substantial year-to-date gains—including First Rate List members American Tower (NYSE: AMT) and W.P. Carey (NYSE: WPC). But it looks investors are going to have to be patient with most REITs for a while longer.

Don’t get me wrong. Best in class REITs are still very much on track to benefit from the same mega-trends I’ve talked about for some time. Among them:

· Growing scarcity of supply for multiple property types, as new development has remained at very low levels since the Federal Reserve began raising interest rates in early 2022.

· The Federal Reserve’s pivot from higher for longer benchmark interest rates, which it began last autumn.

· A “great rotation” from the Big 10 Tech stocks, which continue to trade at unsustainably high valuations relative to business value even as they comprise roughly 35 percent of the S&P 500.

REITs are Staying Conservative in 2025

Another round of earnings results and guidance have once again highlighted the obvious: The combination of still high borrowing costs, an investment public still largely hostile to equity issuance and economic uncertainty has raised the bar dramatically for decision making on new real estate development. And as a result, REITs are building far less than just a few years ago, if at all.

Nor are we likely to see a boom in development for the foreseeable future, with the exception of specialized property types. And most management teams are following the lead of best in class REITs like indoor mall leader Simon Properties (NYSEL SPG)—funding all of their development and even acquisition capital spending with some combination of asset sale proceeds and free cash flow after paying dividends.