High, steady dividend income. Long-term capital appreciation. Excellent portfolio diversification. Low volatility. These are some reasons REITs are popular with real estate investors. As of December 1, 2021, REITs were up nearly 29% for the year with strong performance across sectors, according to Nareit, the National Association of Real Estate Investment Trusts.
Not all REITs are created equal, however, and before you decide to invest in a REIT company, it’s a good idea to do your research. What is their dividend yield and dividend history? How are the financials of the company looking? What types of property are owned, and in which geographical locations? And of course, do they have strong management?
In order to simplify the process for you, we’ve made a list of the best REIT companies of 2022 with strong track records.
What is a REIT?
A REIT, or a real estate investment trust, is a company that owns real estate properties that generate income. Investing in REITS allows individual investors to buy shares in companies that receive gross income from these properties. REITs are required to pay out at least 90% of their taxable income as dividends.
Similar to mutual funds but not to be confused with Exchange-Traded Funds (ETFs), REITs are a popular choice with investors because they offer high, steady dividends. REIT total return performance for the last 20 years has outperformed the S&P 500 Index, other indices, and the rate of inflation.
REITs allow you to diversify across different types of real estate assets, including apartment communities, industrial properties, office buildings and other office properties, shopping centers, and more.
The three types of REIT companies
There are three main categories of REITs that you can invest in. These include:
Publicly traded REIT companies
Publicly traded REITs trade on major stock exchanges such as the NYSE and the Nasdaq exchange and can be purchased by individual investors with an ordinary brokerage account. There are currently more than 200 public REITs on the market according to Nareit.
Public non-traded REIT companies
Public non-traded REITs are also open to all investors, are required to register with the SEC, and must provide audited financial information. However, they do not trade on national securities exchanges.
Public non-traded REITs are bought through a financial advisor or on real estate crowdfunding platforms such as Arrived. These REITs aren’t quite as dependent on market fluctuations, but are less liquid than publicly traded REIT companies.
Private non-traded REIT companies
Private non-traded REITs are unlisted and therefore not open to the public. They are generally exempt from SEC registration, which means they have fewer disclosure requirements, making them not only hard to value and trade, but also more difficult to evaluate. Private non-traded REITs are often only open to institutional investors or high net-worth traders.
We’re not including private non-traded REIT companies in our list of the best REIT companies of 2022 because:
- They are unlisted and, therefore, they are harder to find and effectively evaluate.
- They typically require a high minimum investment to begin trading, account minimums that can often be up to $25,000. They also tend to have steeper fees.
- Many private non-traded REITs are open only to accredited investors with a net worth (excluding their primary residence) of $1 million or more or an annual income of at least $200,000.
Top publicly traded REIT companies
Here are some of the top publicly traded REIT companies. Some made the list because they’re growing quickly, others because of their high dividends and growth prospects. Several of our choices are on here because of a combination of some, or all, of these factors. (Stock price in parentheses.)
American Tower ($260.20)
- Market cap: $120.3B
- 1 year return: -0.59%
- Dividend yield: 2.15%
American Tower is one of the largest global REITs. It’s a leading independent owner, operator, and developer of multitenant communications real estate with a portfolio of approximately 219,000 communicates sites and a highly interconnected footprint of US data center facilities.
The company is largely known for its cellphone towers, in countries such as India (75,000 cell towers), the US (43,000), Brazil (23,000), German (14,700), Spain (11,400) and Mexico (10,100). As more wireless devices penetrate the market and data usage per device and mobile data traffic grows, AMT anticipates high-double-digit market growth through 2026.
Iron Mountain ($52.29)
- Market cap: $15.1B
- 1 year return: 17.19%
- Dividend yield: 4.73%
Iron Mountain is a REIT is the global leader for storage and information management services. Iron Mountain’s portfolio includes records management, data management, document management, data centers, art storage and logistics, and secure shredding. This helps organizations to lower self-storage costs, comply with regulations, and better use their information.
Crown Castle International Corp. ($179.63)
- Market cap: $77.6B
- 1 year return: 13.46%
- Dividend yield: 3.27%
Crown Castle provides wireless carriers with the infrastructure they need to keep people connected and businesses running. Crown Castle is the nation’s largest provider of shared wireless infrastructure, with a significant presence in the top 100 US markets. This is one of the fastest-growing REITs.
Digital Realty ($133.22)
- Market cap: $37.5B
- 1 year return: -14.61%
- Dividend yield: 3.66%
Digital Realty supports the world’s leading enterprises and service providers by delivering the full spectrum of data center, colocation and interconnection solutions. PlatformDIGITAL, the company’s global data center platform, provides a methodology for scaling digital business and efficiently managing data gravity challenges. Digital Realty’s global data center footprint gives customers access to the connected communities that matter to them, with more than 290 facilities in 49 metros across 24 countries on six continents.
Realty Income Corporation ($66.28)
- Market cap: $37.5B
- 1 year return: 0.60%
- Dividend yield: 4.47%
Realty Income, The Monthly Dividend Company, is an S&P 500 real estate company with the primary business objective of generating dependable monthly cash dividends that increase over time. Its monthly dividends are supported by the cash flow from a diversified portfolio of properties located in 49 states, Puerto Rico, and the U.K. This is considered a quickly growing REIT.
New Residential Investment Corporation ($11.16)
- Market cap: $5.2B
- 1 year return: 9.60%
- Dividend yield: 8.96%
New Residential Investment Corp. is a residential REIT that focuses on investing in, and actively managing, investments primarily related to residential real estate. Experts consider this a “best value” REIT.
American Campus Communities, Inc. ($64.77)
- Market cap: $8.9N
- 1 year return: 36.61%
- Dividend yield: 2.90%
American Campus Communities, Inc. is the largest owner, manager, and developer of high-quality student housing communities in the U.S. The company is a fully integrated, self-managed and self-administered REIT with expertise in the design, finance, development, construction management, and operational management of student housing properties.
Americold Realty Trust ($30.24)
- Market cap: $8.1B
- 1 year return: -20.81%
- Dividend yield: 2.91%
Americold is an industrial REIT. The company is the world’s largest owner and operator of temperature-controlled warehouses. Americold owns and operates 158 temperature-controlled warehouses, with approximately 934 million cubic feet of storage, in the U.S., Australia, New Zealand, Canada, and Argentina.
Americold’s facilities are an integral component of the supply chain connecting food producers, processors, distributors, and retailers to consumers. Americold serves approximately 2,400 customers and employs approximately 11,000 associates worldwide.
Medical Properties Trust Inc. ($16.13)
- Market cap: $9.6B
- 1 year return: -21.33%
- Dividend yield: 7.19%
Medical Properties Trust, Inc. is a self-advised REIT that provides capital to healthcare facilities such as hospitals located throughout the U.S. and other countries. The company focuses exclusively on hospitals, which is where the highest intensity of care is provided to patients. MPT is currently the second-largest non-governmental owner of hospital beds in the U.S. MPT’s financing model allows owners of hospitals to unlock the value of their underlying real estate, primarily through sale leaseback transactions.
Store Capital Corporation ($26.65)
- Market cap: $7.2B
- 1 year return: -22.58%
- Dividend yield: 5.78%
Store Capital Corporation is an internally managed net-lease REIT that is the leader in the acquisition, investment, and management of single tenant operational real estate, which is its target market and the inspiration for its name.
Top public non-traded REIT companies
These public non-traded REITs are open to all investors, but as previously mentioned, can only be bought through a financial advisor or real estate crowdfunding platforms such as Arrived. Here are our picks for the best public non-traded REIT companies of 2022.
Streitwise
Streitwise enables investors to own commercial properties through an equity REIT and boasts twenty straight quarters of 8% annualized returns. The company focuses heavily on growing and expanding in already hot markets such as New York and Los Angeles, as well as up-and-coming locations. There is a minimum initial investment of $5,000 to get started with Streitwise. As of this writing, the company only has a single offering in its portfolio, which doesn’t offer as much diversification as most investors like to see.
Arrived Homes
Arrived is built for customers who want a more affordable way to invest in rental properties and diversify their portfolios. Arrived has properties and operations across the country, in 19 active markets, and has funded 119 properties for a total property value of $38 million. What makes Arrived unique is that investors can pick and choose from available rental homes, buy shares of those properties, and not only receive rental income from them, but benefit from property value appreciation as well.
CrowdStreet
CrowdStreet is designed for growth-oriented investors and provides access to a portfolio of multiple private commercial real estate projects. C-REIT investors get direct access to 20-25 projects selected from a broad range of sponsors, sectors, and geographies. According to its website, since launching in 2014, the CrowdStreet Marketplace has closed 647 commercial real estate investment offerings.
FarmTogether
FarmTogether aims to connect creative capital to farmers by democratizing farmland investing. Farmland has historically provided real, positive annual returns. Between 1992 and 2020, farmland provided an average annual return of nearly 11%. During this same time period, the volatility of farmland was just 6.8%. The company boasts $150M in assets under management and target opportunities yield 7-12% returns with 3-9% cash yields.
RealtyMogul
Another real estate crowdfunding platform, RealtyMogul is well-known and experienced in real estate, allowing it to offer institutional quality investments. According to its website, RealtyMogul has posted over $5.2B in deals and over $875 million invested on the platform. It has the largest portfolio amongst its competitors. That said, investors have limited liquidity options and no control over the properties the REIT invests in.
Which type of REIT is right for me?
Not all REITs are right for everyone, and depending on what kind of investor you are, you may choose to skip one form of REIT altogether, or maybe invest in a combination of the two.
Publicly traded REIT companies may be right for you if:
- You’re willing to hold the investment for at least three years.
- You have the stomach for higher risk and market fluctuations.
- You prefer to invest independently rather than through a broker.
Publicly non-traded companies may be right for you if:
- You see this as a long-term investment, perhaps as long as 10 years or more.
- You understand the investment is highly illiquid.
- You’re happy to work with a broker or financial advisor.
Easily invest in rental homes
REITs were established by Congress in 1960 to give all investors, especially small investors, access to income-producing real estate. Residential real estate has been the best long-term investment in modern history, but operational headaches and larger upfront financial commitments prevent many people from participating. At Arrived, our mission is to empower the world to build wealth through modern real estate investing on their own terms.
Now, you can buy shares of properties, earn rental income, and build equity through home appreciation, and let us handle the rest. Browse through available properties to start investing in real estate today.
