Real estate investment trusts, or REITs, are known for their high dividends, but rising interest rates have put pressure on these stocks and driven yields even higher. And retail-focused REITs have been hit especially hard.

However, it's important to realize that not all retail is in the same boat. Here are two REITs in particular that can allow long-term investors to take advantage of headwinds in the retail industry.

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Company (Symbol)

Recent Stock Price

Dividend Yield

P/FFO (2018 Midpoint)

EPR Properties (NYSE:EPR)

$64.65

6.7%

11.1

Kimco Realty Trust (NYSE:KIM)

$16.44

6.9%

11.4

Data source: TD Ameritrade. Prices, yields, and P/FFO as of 6/15/18. FFO = funds from operations.

An investment in millennial spending habits

EPR Properties is a real estate investment trust that focuses on three types of properties: entertainment, recreational, and educational.

EPR's entertainment portfolio is the largest of the three, and consists primarily of megaplex theaters, while the recreation properties include golf properties (TopGolf is one of EPR's largest tenants), ski resorts, waterparks, and more. Entertainment and recreational tenants, both forms of service-oriented retail, combine to make up 76% of the portfolio, and are well-positioned to benefit as more of the millennial generation comes of age.

With more than 75 million Americans in the 18-34 age group, millennials are the largest segment of the population -- and prefer to spend their money on experiences, as opposed to simply buying things. With technological advances and changing consumer tastes, property types that cater to these preferences are becoming much more lucrative. For example, when EPR renovates a megaplex theater to enhance the customer experience (luxury seating, new food and beverage options, etc.), the property's revenue increases by an average of 40%.

The education portfolio not only adds an element of recession-resistant diversification but the market is also experiencing pretty exciting growth in its own right. The number of public charter school students has grown at a 12% annualized rate since 2002, and there are more than 1 million students on waiting lists. Other education property types, such as private schools and early childhood centers, are seeing similar trends.

In a nutshell, this is a company with lots of room to grow over the coming decades that is trading for a rock-bottom valuation.

Strong ability to adapt to the new retail environment

To be clear, retail is definitely undergoing a big change, and many retail REITs are suffering a bit as a result. And Kimco Realty is no exception.

However, Kimco is in a good position to adapt. About three-fourths of the company's portfolio consists of grocery-anchored shopping centers (as opposed to ones where a department store is the main draw), and about 60% of the company's smaller tenants are service-oriented businesses, which are actually doing quite well as a group.

The company has been affected by store closures from companies such as Sears Holdings, Toys R Us, and others, but the effect is smaller than you may think. As of March 31, announced store closures have impacted just 1.2% of Kimco's base rent. In all, just 5% of Kimco's portfolio is composed of retailers that could struggle to adapt to the new retail landscape.

And the company is seeing lots of demand from growing retailers. For example, discount-oriented retailers like Five Below and T.J. Maxx (Kimco's largest tenant) are actively expanding, as are experiential and service businesses like Planet Fitness and Chipotle Mexican Grill, just to name a couple.

The numbers paint a positive picture. Kimco's occupancy is 96.1%, which is actually higher than at the end of any first quarter in the previous five years, and rent continues to grow at a 4% annualized rate per square foot.

Kimco is aggressively deploying resources to redevelop existing properties and develop new ones that are designed to succeed in the new retail environment. The company is making all the right moves, and shareholders who get in while retail is still in transition will get a near-7% dividend yield for their patience.

Matthew Frankel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Chipotle Mexican Grill. The Motley Fool recommends Five Below and Planet Fitness. The Motley Fool has a disclosure policy.