One of the most popular types of real estate investment trusts (REITs) is the retail REIT. Retail REITs purchase, own and lease commercial space to retail outlets. One reason for the popularity of retail REITs is they frequently lease properties to well-known companies, such as The Home Depot, Lowe’s, Dollar Tree, CVS Pharmacy, Walgreens and 7-Eleven Inc.
As 2022 draws to an end, some of the better retail REITs have bounced off their 52-week lows and are beginning to show some price momentum. Take a look at the three best-performing REITs over the past four weeks:
Whitestone REIT WSR is a Houston-based REIT that owns 54 properties, mostly consisting of retail spaces but some office and mixed-use properties as well. Its portfolio is focused on three states — Arizona, Texas and Illinois — and it looks for properties to purchase in affluent areas. Approximately 93% of its portfolio is triple-net leased.
Over the past four weeks, Whitestone REIT is up 3.74%, making it the best-performing retail REIT over that time. Its 52-week range is $8.15 to $13.76, and a recent closing price was $9.70. Whitestone REIT pays a monthly dividend of $0.04, and its annual dividend of $0.48 presently yields 4.9%. The funds from operation (FFO) payout ratio of 47% provides plenty of room for dividend raises going forward.
In third-quarter operating results, Whitestone REIT announced that revenue and FFO had both increased about 9% from the third quarter of 2021. Last week, Whitestone REIT shared that it acquired Anderson Arbor, an 89,746-square-foot open-air shopping center in Austin, Texas. Anderson Arbor is over 90% leased and should boost the FFO going forward.
Agree Realty Corp. ADC is a net-lease REIT with 36 million square feet across 1,707 properties nationwide. Its diversified investment-grade retail tenant portfolio includes Sherwin-Williams, Walmart., Home Depot, TJX Companies, AT&T, CVS, Aldi, Wawa Inc. and many other well-established companies not likely to miss rent payments regardless of economic conditions.
Over the past four weeks, Agree Realty Corp was up 3.42%, making it the second-best-performing REIT in this category. Its 52-week performance is also in the top 10 among all REITs.
Agree Realty’s 52-week range is $61.82 to $80.44, and a recent closing price was $71.68. Its monthly dividend has been raised twice within the past year and is presently $0.24. The forward annual dividend of $2.88 yields 4%.
National Retail Properties Inc. NNN is a net-lease REIT that owns a diversified group of stand-alone retail outlets across the U.S. It too has a stable tenant base with names like 7-Eleven, Sunoco LP, Best Buy, Camping WorldCWH, BJ.’s Wholesale Club and Chuck E. Cheese. Its total portfolio consists of 3,349 properties across 48 states.
Over the past four weeks, National Retail Properties has risen 2.9%, making it the third-best-performing REIT in the retail category over the past four weeks. The 52-week range is $38.05 to $48.90, and its most recent closing price was $46.10.
National Retail Properties has a lot going for it. Its properties are 99.4% occupied with an average lease term of 10.4 years. And as proudly stated on its website, National Retail Properties has raised its annual dividend for 33 consecutive years. The $2.20 annual dividend is paid quarterly and presently yields 4.77%.
Weekly REIT Report: REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it’s too late. Benzinga’s in-house real estate research team has been working hard to identify the greatest opportunities in today’s market, which you can gain access to for free by signing up for Benzinga’s Weekly REIT Report.
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