Investors looking over the vast number of real estate investment trusts (REITs) are sometimes confused as to which ones will most likely create both appreciation and a good dividend return over time. The combination of these two performance matrices creates the "total return" of the REIT.
Many REITs perform well for short periods but do not sustain those results over a longer period. With the headwinds of COVID-19, inflation and increases in interest rates over the past five years, it hasn't been an easy time for the REIT sector in general.
However, some individual REITs have withstood the headwinds and captured excellent gains. Take a look at four REITs with double-digit total returns over the past three- and five-year time frames.
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Iron Mountain Inc. IRM is a Portsmouth, New Hampshire-based specialty REIT with a focus on information management and storage, data center infrastructure and asset lifecycle management. Iron Mountain was founded in 1951 and has more than 240,000 customers worldwide. In recent years, it has shifted its focus from paper storage to data storage.
On Feb. 22, Iron Mountain reported its fourth-quarter operating results. Funds from operations (FFO) of $0.83 per share beat the consensus estimate of $0.81 and its FFO of $0.74 per share in the fourth quarter of 2022. Revenue of $1.42 billion beat the fourth-quarter 2022 revenue of $1.28 billion but could not meet the analyst estimates of $1.45 billion.
On March 15, Wells Fargo analyst Eric Luebchow maintained an Overweight position on Iron Mountain and raised the price target from $80 to $90. Barclays' analyst Brendan Lewis also has an Overweight position from early March on Iron Mountain, with a $91 price target.
Iron Mountain's three- and five-year total returns are 129.4% and 150.54% respectively.
Tanger Inc. SKT, formerly called Tanger Factory Outlet Centers Inc., is a Greensboro, North Carolina-based retail REIT that owns, coowns or manages 40 indoor shopping centers and outdoor factory outlet malls with 15.6 million square feet and over 3,000 stores across 20 states and in Canada. Tanger Factory Outlet Centers was founded in 1981 and had its initial public offering (IPO) in May 1993. Tanger's occupancy rate at the end of 2023 was 97.3%.
On Feb. 15, Tanger reported excellent fourth-quarter operating results. FFO of $0.52 beat the estimate of $0.50. Revenue of $127.48 million beat the estimate of $119.04 million and was 9.46% above revenue from the fourth quarter of 2022 of $116.46 million. Additionally, full-year core FFO was announced in a range from $2.01-$2.09 per share, with a midpoint above the analyst consensus estimate of $2.03 per share.
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On April 5, Bank of America Securities analyst Jeffrey Spector upgraded Tanger from Underperform to Neutral and raised the price target 29.1% from $24 to $31. On March 22, Citigroup analyst Michael Bilerman also upgraded Tanger from Neutral to Buy and raised the price target from $30 to $33.
Tanger's three- and five-year total returns are 94.41% and 56.76%, respectively.
Plymouth Industrial REIT Inc. PLYM is a Boston-based industrial REIT that owns and operates 156 properties with over 34 million square feet in 13 East Coast and Midwestern markets. Its portfolio occupancy as of Dec. 31, was 98.6%. During the fourth quarter of 2023, it leased an aggregate of 966,167 square feet, with a 23.4% increase in rental rates on a cash basis from these leases.
In 2023, Plymouth outperformed larger and more well-known industrial REITs such as Prologis Inc. PLD and Rexford Industrial Realty Inc. REXR. Still, this smaller REIT receives far less publicity than its rivals.
On Feb. 21, Plymouth reported its fourth-quarter operating results. Adjusted FFO (AFFO) of $0.48 per share was a 14.29% increase over AFFO of $0.42 in the fourth quarter of 2022. Revenue of $50.75 million missed the Street's estimate of $50.91 million but topped its revenue of $47.32 million in the fourth quarter of 2022.
Plymouth Industrial also announced an increase in its quarterly dividend from $0.225 per share to $0.24 per share. The $0.96 per share annual dividend presently yields 4.48%.
On March 27, Barclays analyst Brendan Lynch initiated coverage on Plymouth Industrial REIT with an Equal-Weight rating and announced a price target of $22.
On April 2, Plymouth Industrial reported on its leasing activity for the first quarter of 2024. Over 1.3 million square feet of space with terms of at least six months was leased with a 17.1% increase in rental rates. These included both renewals and new leases. Total same-store occupancy at the end of the first quarter was 98.3%.
Plymouth Realty's three- and five-year total returns are 39.62% and 58.28%, respectively.
Lamar Advertising Co. LAMR is a Baton Rouge, Louisiana-based specialty REIT, founded in 1902 with a focus on owning and leasing 363,000 displays throughout the U.S. and Canada, including digital and print billboards, interstate logos and airport advertising formats. Lamar Advertising and Outfront Media Inc. OUT are the only two REITs exclusively devoted to billboard and display advertising.
On Feb. 23, Lamar Advertising reported its fourth-quarter results. FFO of $1.46 per share beat the estimate of $1.35 per share and was 124.62% better than its fourth-quarter 2022 FFO of $0.65 per share. Revenue of $555.91 million topped the estimate of $547.66 million and also bested its revenue of fourth-quarter 2022 revenue of $535.51 million.
On Feb. 26, Morgan Stanley analyst Benjamin Swinburne maintained an Equal-Weight rating on Lamar and increased the price target from $105 to $110. The same day, JPMorgan Chase & Co. analyst Richard Close maintained a Neutral rating on Lamar and raised the price target from $92 to $109.
Lamar pays a quarterly dividend of $1.30 per share, and the annualized $5.20 dividend yields 4.52%. Its total three- and five-year returns are 34% and 67.52%, respectively.
The following table summarizes all four REITs and the total returns made since 2019:
| REIT | SYMBOL | TYPE | 3-YR RETURN | 5-YR RETURN |
| Iron Mountain Inc. | IRM | Specialized | 129.4% | 150.54% |
| Tanger Inc. | SKT | Retail | 94.41% | 56.76% |
| Plymouth Industrial REIT | PLYM | Industrial | 39.62% | 58.28% |
| Lamar Advertising Co. | LAMR | Specialized | 34% | 67.52% |
(Dates used: April 5, 2021, and April 5, 2019, to April 5, 2024)
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