As the Vanguard Real Estate ETF VNQ is down roughly 31% year-to-date, real estate investment trusts are being beaten down as the sector continues to decline. With the REIT sector back down to levels not seen since January 2019, now may be an opportune time to scoop up undervalued shares.
This is especially true with REITs as they tend to outperform all other major asset classes, providing an annualized total return of 10.8% from 1992 to 2017. Although rising rates and inflation can cause a sticky situation in the near term for real estate investment trusts, so it may be wise to turn to shopping center REITs, as consumers will always need necessities such as groceries.
Learn more about these two high-yielding REITs benefiting from shopping centers in the United States.
Regency Centers Corp. REG is offering a dividend yield of 4.72% or $2.50 per share annually, utilizing quarterly payments, with a track record of increasing its dividends once in the past year. Regency Centers is the largest shopping center-focused retail REIT, with 80% of properties featuring a grocery anchor and grocery stores representing 20% of its annual base rent.
Regency Centers has a portfolio with an interest in 404 properties, which includes more than 54 million square feet of retail space, and has provided investors with an annualized total shareholder return since its IPO of 9.73%. Six of Regency Centers top 10 tenants include grocery stores such as Kroger Co KR, Publix, and Amazon.com Inc's AMZN subsidiary Whole Foods to name a few.
Acadia Realty Trust AKR is offering a dividend yield of 5.58% or 72 cents per share annually, through quarterly payments, with an inconsistent track record of increasing its dividends. Acadia Realty Trust is a real estate investment trust which specializes in the operation, management, leasing, renovation, and acquisition of shopping centers and mixed-use properties with retail components, and has roughly 192 properties, as of Sept. 27, 2022.
“We finished another robust quarter evidenced by our operating results exceeding expectations. With the continuing momentum in Street retail, our fundamentals remain strong, and we expect this strength to continue to play out over the next several years,” stated Kenneth F. Bernstein, president and CEO of Acadia Realty Trust.
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