Commercial real estate and real estate investment trusts (REITs) have surged in popularity over the last decade or so, as investors have sought higher highs. While their appeal has diminished somewhat in recent months as the Federal Reserve has raised rates, not all REIT/property sub-sectors should be ignored. There are a few that have fundamentals too good to pass on and offer dividend growth in excess of the rise in interest rates.
A prime example would be the apartment REITs.
The sector has been a top performer since the recession. More importantly, that performance should continue. Rents and demand continue to grow. And that’s wonderful news for future apartment REITs’ dividends. In the end, the sector still remains strong and a big buy for income seekers – no matter what the Fed is doing.
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