The commercial real estate sector faced challenges last year as the Federal Reserve began reducing interest rates, albeit not as quickly as the market had anticipated due to high inflation rates. This led to higher interest rates, impacting property values and the ability of real estate investors to secure funding for new deals. As a result, the average real estate investment trust (REIT) delivered a modest return, significantly underperforming the broader market.
Despite recent struggles, REITs have historically outperformed stocks over the long term, making them an attractive investment option. One top REIT to consider this year is Realty Income (NYSE: O). This REIT has been a consistent income generator, with a track record of paying monthly dividends and increasing its payout over the years. Realty Income has delivered strong total returns and remains a top choice for investors seeking passive income.
Realty Income’s impressive dividend history sets it apart from other REITs. The company has paid 654 consecutive monthly dividends and has increased its payment 128 times since going public in 1994. With 30 consecutive years of dividend growth, Realty Income has a proven track record of delivering consistent income to investors. The REIT’s dividend yield is currently over 6%, making it an attractive option for income-focused investors.
In addition to its strong dividend performance, Realty Income has a massive market opportunity for growth. The company is the seventh-largest global REIT, with a diverse portfolio of commercial real estate assets across multiple countries. Realty Income has identified a significant market opportunity in net lease real estate, with a total addressable market value of trillions of dollars in the U.S. and Europe. The company’s expansion into new investment verticals and markets positions it well for future growth.
Realty Income’s financial strength and market opportunity have enabled it to grow its adjusted funds from operations per share at a solid rate. The company has a track record of delivering value to investors, with an average annual total return of 14.1% since its public market listing in 1994. With its focus on income generation and long-term growth, Realty Income remains a top choice for investors looking for steady income and potential total returns.
In conclusion, Realty Income stands out as a top REIT to buy in 2025. With its consistent dividend payments, strong market position, and growth potential, Realty Income offers investors a compelling opportunity for passive income and long-term growth. Consider adding Realty Income to your investment portfolio for a reliable source of income and the potential for above-average total returns in the years to come.
