Real estate investment trusts, often abbreviated as REITs, are a wonderful way for average people to get started as investors. REITs are traded on stock exchanges. They represent part ownership in a company that’s invested in real estate holdings. This instrument was created by an act of the US Congress in 1960. One of the biggest benefits of REITs is that they real estate investments more accessible.
REITs are usually made up of a portfolio of related real estate holdings. Some, for example, are focused one medical spaces. Others are centered on hospitality or on office spaces. Many of the biggest and most desirable REITs are made up of a diversified portfolio of holdings. REITs are well known for paying dividends that often surpass those of standard stocks.
That dividend yield is one reason REITs are a solid pick for right now. During 2020, COVID-19 affected many industries. But real estate is always in demand, either for use or as an investment. In 2021, REITs are expected to be a reliable vehicle for people looking to earn more than bonds and savings accounts will yield. There are three REITs, in particular, that savvy investors should consider.
The first is Annaly Capital Management. This REIT is invested heavily in mortgage backed securities in both the residential and commercial market segments. Although 2020 was very up and down for Annaly, 2021 is off to a promising start. As of January 2021, the dividend for this REIT was slightly above 11%. Annaly Capital Management has steadily seen a yield of more than 10% annually since 2012.
City Office REIT is another great option for investors in 2021. This is a more specialized REIT, invested in high quality office buildings in southern and western cities like San Diego, Denver and Phoenix. As of January 2021, City Office REIT was paying a dividend of more than 6%.
Finally, Pasadena, CA, is home to Alexandria Real Estate Equities. This REIT is focused specifically on properties linked to biological enterprises. This includes facilities used for research related to agriculture and other life science related industries. The stock price has showed solid growth recently. In January of 2021, dividends sat at just under 2.5% but they’re projected to improve, too.