Best Infrastructure REITs

Infrastructure REITs have gained traction in recent years due to their stable income potential and long-term growth prospects. These real estate investment trusts primarily invest in physical infrastructure assets such as toll roads, airports, telecommunications towers, and utility networks.

Infrastructure REITs typically generate revenue through long-term contracts or leases with tenants, providing a steady stream of income for investors. With the growing demand for infrastructure upgrades and expansion globally, these REITs are well-positioned to benefit from increasing infrastructure spending by governments and private entities.

What is an Infrastructure REIT?

Infrastructure REITs own and manage properties used by cellular and wireless communication providers. They then collect rent from tenants who use the property. This may include:

• Telecommunication Towers
• Fiber Cables
• Energy Pipelines
• Wireless & Wired Infrastructure
• Waste Management Facilities
• Airports and Airfields
• Road Construction and Maintenance

Benefits of Infrastructure REITs

• Lease Structure: The lease structure for these properties is primarily long-term. A common lease is for 5-10 years, with automatic rent increases built right in. This helps maintain profits and makes them easier to predict.
• Regulations and Zoning: Since there are actually a lot of limitations when it comes to regulations and zoning for communication tower supply, this is great for Infrastructure REITs. It means there is less chance of oversupply and better opportunities for tenant retention and pricing power.
• Increasing Value: Real estate and infrastructure projects can also be sold at some point when they rise in value so much that the REIT feels it is best to take the money, thus returning more dividends to investors.

Risks of Infrastructure REITs

• Interest Rates: As with all REITs, interest rates are a risk to keep in mind. When the interest rates go up, it’s not good for share prices. Higher returns are expected on investments that are income-based, but the interest rates can deter that from happening. When interest rates are on the rise, the demand for REITs goes down. Some investors will go for safer, lower-risk investments instead.
• New Regulations: Although regulations and zoning are a benefit, there is also a risk from new regulations. They can be costly changes to an investment with an already diverse nature.

Investing in infrastructure REITs can be a great way of making passive income. Like with most REITs however, a long-term investment is the key to making the most in returns. While keeping in mind the risks along with the benefits, and paying attention to the economy and interest rates, these REITs are a rather low-risk investment with the potential for great rewards.

Largest Infrastructure REITs

Industry Overview

Quarterly Performance Data

All Infrastructure REITs

REIT Alternatives

REITs provide a low-cost and simple way to invest in real estate. However, they aren't the only option available to generate passive income through real estate with a low minimum investment.

Real estate crowdfunding offers investors the ability to decide which properties they want to invest in while still enjoying passive income at a fraction of the cost of traditional methods of investing in real estate. Here are some of our favorite real estate crowdfunding platforms:

Frequently Asked Questions