3 REITs That Have Crushed A Two-Year REIT Bear Market

Over the past 22 months, real estate investment trusts (REITs) have been decimated as high inflation, Federal Reserve interest rate hikes, declines in tenant occupancy, war and the threat of a hard-landing recession have impacted these stocks significantly.

The peak for REITs was on Dec. 31, 2021. The Vanguard Real Estate Index Fund ETF VNQ, which tracks the performance of the MSCI US REIT Index, touched a high of $109.09 that day, but it's been downhill ever since. Its total return, including dividends paid since then, is negative 32.01%.

But a handful of REITs have been able to defy the bear market and have prospered. Take a look at three REITs that have performed especially well since the beginning of 2022.

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Tanger Factory Outlet Centers Inc. SKT is a Greensboro, North Carolina-based retail REIT that owns 37 indoor shopping centers and outdoor factory outlet malls covering 14 million square feet and over 2,700 stores across 20 states and Canada. Tanger Factory Outlet Centers was founded in 1981 and had its initial public offering (IPO) in May 1993.

Tanger investors received positive news recently. On Oct. 13, Tanger announced an increase in its quarterly dividend from $0.245 to $0.26 per share, payable Nov. 15 to stockholders of record on Oct. 31. This represents a 6.1% increase in its annualized dividend from $0.98 to $1.04 per share.

On Oct. 12, J.P. Morgan analyst, Michael Mueller upgraded Tanger Factory Outlet Centers from Underweight to Neutral and raised the price target from $24 to $25.

Tanger's total return since Jan. 1, 2022, is 29.48%.

Omega Healthcare Investors Inc. OHI is a Hunt Valley, Maryland-based triple-net equity healthcare REIT that provides financing, capital and leasing to 66 operators in 893 senior housing, skilled nursing and assisted living facilities across 42 states throughout the U.S. and the United Kingdom. Omega Healthcare Investors has no part in the day-to-day management of these facilities, which are run by the operators. 

Analysts have been quite supportive of Omega Healthcare recently, citing increased occupancy in its properties and beneficial lease restructurings. On Oct. 10, Bank of America Securities analyst Joshua Dennerlein upgraded Omega Healthcare from Neutral to Buy and announced a $36 price target. On Oct. 17, Wells Fargo analyst Connor Siversky maintained an Equal-Weight rating on Omega Healthcare and raised the price target from $33 to $34.

Omega Healthcare pays a $0.67 quarterly dividend, and the $2.68 annual dividend yields 7.94%.

Omega Healthcare's third-quarter earnings will be announced on Nov. 2. Omega's total return since Jan. 1, 2022, is 27.76%

Iron Mountain Inc. IRM is a Portsmouth, New Hampshire-based specialty REIT that provides storage and information management services to over 225,000 organizations worldwide, including 95% of Fortune 1000 companies. Iron Mountain was founded in 1951 and had its IPO in February 1996.

On Aug. 3, Iron Mountain announced an increase in its quarterly dividend from $0.619 to $0.65 per share. The annual dividend of $2.60 per share yields 4.35%. However, the payout ratio is over 90%, so funds from operations (FFO) over the next few quarters will be particularly important.

On Aug. 22, RBC Capital Markets analyst Jonathan Atkin upgraded Iron Mountain from Sector Perform to Outperform and raised the price target from $58 to $68.

There has been no recent news for Iron Mountain, yet it continues to have a slow and steady increase in share price. Unlike most REITs, Iron Mountain has had a rising trendline over the past 22 months, the shares have traded above the 50- and 200-day moving averages, and its total return since Jan. 1, 2022, is 24.73%.

Iron Mountain will announce its third-quarter operating results on Nov. 2. 

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