Real estate investment trusts (REITs) come in lots of flavors, with the only common denominator being rules about concentration of assets and the requirement they pass 90% of their taxable income on to their shareholders.
But because that's how human beings do things, they're divided into categories for the purpose of comparison and discussion, even though their portfolios may be a mix of categories and quite diverse within those silos themselves.
Industrial REITs make up one of those categories, and they include owners and operators of properties that lease to tenants who operate by land, sea, and air. Logistics and storage, for instance, come heavily into play here, meaning e-commerce helps drive growth for many players in this space, along with more historically traditional activities such as manufacturing and self-storage.
For your spring-into-April investing consideration, we looked for some industrial REITs that have good to very good yield histories and portfolios that promise to sustain that performance. We chose three that aren't among the usual big names mentioned in their niches but definitely deserve a look.
They are One Liberty Properties (NYSE: OLP), Industrial Logistics Properties Trust (NASDAQ: ILPT), and National Storage Affiliates (NYSE: NSA). Here's that look at each.
One Liberty Properties
At year's end, Long Island, New York-based One Liberty Properties had a portfolio of 125 properties in 31 states, with 10.7 million square feet that was 96.9% occupied and had an average remaining lease term of six years.
It's a diversified group, geographically and otherwise, with 50.8% of its income from industrial tenants and 33.9% from a wide range of retail clients, and the rest a mix of restaurants, health and fitness, and theater businesses. Three states -- Texas, South Carolina, and New York -- account for just more than 8% each as the leaders in its geographical footprint.
One Liberty has been around since 1982 and long focused on retail before switching to industrial beginning in 2012. President/CEO Patrick Callan Jr. told REIT Magazine: "For the past three to five years, the vast majority of our underwriting has been dedicated to industrial buildings. We think that long term, industrial is a good place to play."
In that piece, Callan also notes that 21.5% of its outstanding shares are insider-owned, which "dramatically differentiates" his company from its competitors.
One Liberty has paid a dividend of $0.45 per share for the past 14 quarters, dating back to the fourth quarter of 2017, and raised it consistently for eight years before then.
One Liberty stock, meanwhile, closed on March 26 at $21.97 per share, giving it a yield of 8.19% based on an annual dividend of $1.80. That closing price is 9.66% below the stock's 52-week high of $24.32 it reached on March 12.
Industrial Logistics Properties Trust
Boston-based Industrial Logistics Properties Trust went public in January 2018, and as of Dec. 31, 2020, had a portfolio comprising 289 industrial and logistics properties with 35 million rentable square feet that's 98.5% leased to 273 tenants, with an average of 9.5 years remaining on their leases.
About half of this REIT's rent comes from 63 industrial and logistics properties made up of approximately 18.1 million square feet located in 30 states on the U.S. mainland. The other half comes from 226 properties in Hawaii.
As for strategy, the company says this: "We believe the U.S. retail industry is experiencing a major shift away from stores and shopping centers to e-commerce sales platforms and that this change is causing increasing demand for industrial and logistics real estate. We intend to expand our business by focusing on properties that may benefit from the growth of e-commerce."
Industrial Logistics declared its first dividend on April 27, 2018, a payout of $0.27 per share. Since then, it's paid $0.33 per share per quarter.
Industrial Logistics stock, meanwhile, closed on March 26 at $23.73 per share, giving it a yield of 5.56% based on an annual dividend of $1.32. That closing price is 2.63% below the stock's 52-week high of $24.37 it reached on Dec. 16.
National Storage Affiliates
At the end of 2020, Denver-based National Storage Affiliates had a portfolio of 821 self-storage facilities in 36 states and Puerto Rico.
The company focuses on the top 100 metro areas and differentiates itself from other self-storage REITs by allowing individual operators to maintain their own brand identity through a unique ownership structure known as being a Participating Regional Operator (PRO).
National Storage Affiliates declared its first dividend on June 26, 2015, a payout of $0.15 per share. Since then, it's consistently raised its dividend by a penny or two a share each year, most recently paying $0.35 a share in the first quarter of 2021.
National Storage Affiliates stock, meanwhile, closed on March 26 at $26.44 per share, giving it a yield of 5.67% based on an annual dividend of $1.50. That closing price is 3.6% below the stock's 52-week high of $27.35 it reached on August 18.
The Millionacres bottom line
While each of these stocks is close to their 52-week high, their core portfolios and growth strategies seem poised to reasonably withstand a rough market if that emerges in the months ahead, and they could enjoy significant share price growth over time.
Plus, as REITs, income is the bottom line for many real estate investors looking at these and other potential buys, and all three of these issues present perhaps even more confidence about keeping up the payouts than boosting the stock price.