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15 REITs to Buy Now if There's a Recession Ahead

By Marc Rapport - Jul 19, 2022 at 7:10AM
Street signs saying Recession and Recovery at an intersection.

15 REITs to Buy Now if There's a Recession Ahead

This diverse list of proven performers can help get your portfolio profit through an economic downturn

Investing in real estate has traditionally been regarded as a solid hedge against inflation and recession because of the ability to raise rents and because investors can focus on properties occupied by essential businesses whose services will continue to be needed -- maybe even more so -- in an economic downturn.

Real estate investment trusts (REITs) are a great way to get involved. They own pools of income-producing properties and are required by tax law to pay out at least 90% of their income as dividends, adding to their ability to contend with the economic downturn so widely expected soon.

There are about 225 publicly traded REITs offering liquidity, transparency, income, and the potential for share price appreciation. Here are 15 to consider.

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A gold crown sitting atop stacks of cash.

1. Federal Realty Trust

Federal Realty Trust (NYSE:FRT) is a Dividend King, a title bestowed on that exclusive club of S&P 500 stocks that have raised their payouts for at least 50 straight years.

Make that 54 for this owner of more than 100 retail and live-shop centers focused on high-end neighborhoods in several major markets on both coasts. Federal Realty Trust's stock currently sells for about $98 a share and yields around 4.4%.

ALSO READ: Dividend Kings of 2022

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People looking at laptop in a warehouse.

2. Prologis

Bigger can be better when it comes time to resist a recession. Prologis (NYSE:PLD) is the largest owner of logistics and distribution space around, with more than 4,000 properties and about a billion square feet across the globe.

Recession or not, stuff will still have to be shipped and stored. Prologis stock currently yields about 2.6% at around $122 a share.

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Medical worker embraces person at table.

3. LTC Properties

LTC Properties (NYSE:LTC) has a portfolio of about 180 assisted living and senior housing centers. The rapid aging of the baby boomers only adds to the necessity for these kinds of operations, and the need will be there regardless of the economy.

LTC stock is yielding a nice 6% or so at a share price of about $39, and as a bonus, it pays monthly instead of quarterly.

ALSO READ: 8 Best Monthly Dividend Stocks With High Yields

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Businessperson walking with folder of papers on rooftop balcony and staring out at cityscape.

4. Cousins Properties

Cousins Properties (NYSE:CUZ) specializes in Class A office towers, basically newer trophy properties in high-growth Sun Belt markets like Austin and Dallas, Texas; Nashville, Tennessee; Charlotte, North Carolina; Tampa, Florida; Atlanta; and Phoenix.

These kinds of buildings in these types of markets attract tenants that typically have the deep pockets to keep the rent coming through thick and thin. Cousins has boosted its dividend for five straight years and, at a share price of about $29, is yielding around 4.5%.

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A long line of United States Postal Service trucks.

5. Postal Realty Trust

A recession makes things tough for a lot of businesses to pay the rent. That's not likely the case with Postal Realty Trust (NYSE:PSTL). This unique REIT has but one tenant -- the U.S. Postal Service -- and owns more than 1,000 post offices across the country. Right now, Postal Realty Trust is delivering a nice yield of about 6% at a share price of around $15.

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Family carrying shopping bags through shopping center.

6. Whitestone REIT

Whitestone REIT (NYSE:WSR) specializes in owning community-focused, open-air shopping centers in just the kinds of Sun Belt markets where many people working in those Class A office towers live and play. This retail REIT also pays monthly and is yielding around 4.6% at a share price of about $10.

ALSO READ: Why Open-Air Retail Is a Solid Investment

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Mobile homes in a mobile home park.

7. UMH Properties

UMH Properties (NYSE:UMH) is a long-time owner and operator of manufactured home communities. When times get tough, the relative affordability of these properties can make them particularly attractive to both renters and people who buy their homes from the company on site. UMH now owns 130 of them in 11 states, and its stock is selling for about $19 a share, good for a yield of around 4.4%.

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Physician kneeling to talk to a child in a hospital hallway.

8. Welltower

Welltower (NYSE:WELL) is considered the largest healthcare REIT, with a portfolio of nearly 1,900 senior housing, outpatient medical, health system, and long-term care facilities -- all essential businesses in any kind of market. Welltower stock is currently selling for about $97 and yields around 3%.

ALSO READ: Investing in Healthcare REITs

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Person packing a box in a self-storage unit.

9. Life Storage

The pandemic helped drive a surge in the self-storage business, and a recession could do the same as people continue to relocate and/or downsize.

Life Storage (NYSE:LSI) is a major player here, with more than 1,100 facilities in 36 states that it both owns directly and manages for other owners.

Life Storage just raised its dividend by 8%, yielding around 3.5% at a share price of about $112.

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People working in a data center.

10. Equinix

The demand for data storage and movement seems likely to just continue growing and Equinix (NYSE:EQX) is positioned to profit, with an international network of more than 240 data centers providing critical infrastructure to thousands of customers large and small.

Equinix has raised its dividend for seven straight years and its stock is now selling for about $634 a share and yielding about 1.9%.

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A Tanger Factory Outlets location.

11. Tanger Factory Outlet Centers

Tanger Factory Outlet Centers (NYSE:SKT) owns or partially owns 36 open-air outlet centers that, for many shoppers, have become synonymous with upscale clothing at bargain prices. Sounds like a good recipe for recession resistance.

Tanger also just broke ground for a new center in Nashville, so it's in growth mode, too. Tanger stock is currently selling for about $15 a share and yielding about 5.4%. This just might be a retail REIT that rides out the coming storm quite nicely.

ALSO READ: Investing in Retail REITs

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Looking up at a mobile tower.

12. Crown Castle International

Crown Castle (NYSE:CCI) is another critical infrastructure player whose business should be recession-proof. A growing portfolio of more than 80,000 miles of cable fiber, 40,000 cell towers, and 115,000 small cell nodes is helping power the expansion of 5G technology. And seven straight years of dividend hikes has its yield at about 3.4%, with a share price of about $172.

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Two people dressed as aristocrats might have dressed 100 or more years ago and having tea and smiling.

13. Essex Property Trust

Apartment rentals can be a good business during inflation and recession. The relatively short leases allow for quickly raising the rent, and, well, people have to live somewhere.

Add to that a portfolio of about 250 apartment communities in desirable southern California, the San Francisco Bay area, and Seattle markets, and you have the recipe for success that has helped Essex Property Trust (NYSE:ESS) raise dividends for 29 straight years.

That makes it a Dividend Aristocrat. Currently, the yield is about 3.35% at a price of around $265 per share.

ALSO READ: S&P 500's Best Dividend Aristocrats

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A person pumping gas into a car at a gas station.

14. Getty Realty

Getty Realty (NYSE:GTY) has a specialized niche that should do just fine if the economy goes south. This REIT currently owns 1,028 free-standing gas and convenience stores, car washes, and auto parts and service shops in 38 states and Washington, D.C. The portfolio is 99.5% leased, and the stock is yielding about 6.1% at around $27 a share.

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The inside of a cannabis greenhouse.

15. Innovative Industrial Properties

Innovative Industrial Properties (NYSE:IIPR) holds a unique spot as the first -- and by far the largest -- REIT landlord for state-licensed medical marijuana growers across the country. Traditional lenders won't touch this business as long as pot remains illegal at the federal level.

Innovative has rapidly grown its portfolio to 111 properties in 19 states. It's also grown its dividend rapidly since going public in 2017, yielding about 6% at a share price of about $111.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

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These REITs can help defend against a slumping economy's attack on your assets

Not all REITs are created equal, even within the same sector. Each REIT we just looked at has the portfolio, past performance, and potential to help ease a recession's rampage on your nest egg.

Marc Rapport has positions in Crown Castle International, Innovative Industrial Properties, Life Storage Inc, Postal Realty Trust, Inc., and Whitestone REIT. The Motley Fool has positions in and recommends Crown Castle International, Equinix, Innovative Industrial Properties, and Prologis. The Motley Fool recommends Life Storage Inc, Tanger Factory Outlet Centers, and UMH Properties. The Motley Fool has a disclosure policy.

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