Dividends Premium REITs: April 2025

REIT yields are the highest since 2020, but 2025's risks are far lower.

Welcome to Dividends Premium REITs for April!

It’s fair to say the past month has not been kind to real estate investment trusts. Two thirds of the companies in my REIT Rater are now underwater year to date, half of them by double-digit percentages. And that includes four on my First Rate REITs list.

The silver lining is we haven’t seen so many safe yields north of 5 percent in this sector since 2020. Risk of a US recession later this year has risen. But after five years of conservative operating and financial strategies, REITs are far better prepared for a downturn than they were in 2019. And at this point, a recession isn’t likely to include pandemic protocols forcing public places to shut down.

This month’s top fresh money buys haven’t been immune from selling. And the longer the stock market is in turmoil, the more likely they’ll dip further. But at current prices, they offer a compelling combination of high, safe yield and recovery potential. Thanks for reading.—RC

2020’s Monster Yields With 2025’s Lower Risk

Inflation is on the run, or is it? In March, the Producer Price Index registered a monthly decline since October 2023—a seasonally adjusted -0.4 percent. The Consumer Price Index was also lower (-0.1 percent). And the so-called “core” rate excluding food and energy was up just 2.8 percent for the last 12 months.

For CPI, that’s the lowest year-over-year increase in four years. On the other hand, it’s also still well above the Federal Reserve’s long-term target of 2 percent. And the March data was collected before the Trump Administration’s 10 percent across-the-board tariff went into effect for all imports.

Bond market action has been more worrisome. After sliding briefly under 4 percent in early April, the 10-year Treasury note yield suddenly shot up close to 4.5 percent last week. And the Real Estate SPDR ETF (XLRE) plunged nearly -15 percent in response, before recovering some lost ground as rates backed off later in the week.

My First Rate REIT recommendations’ performance is pretty much a mixed bag as we wait on their Q1 results and guidance updates. The stocks are currently underwater by -3.75 percent on average for 2025. But there’s considerable variation among the individual REITs, from a year-to-date gain of 19.84 percent for American Tower (NYSE: AMT) to a loss of -17.12 percent for Alexandria REIT (NYSE: ARE).

I’m still very confident in prospects for all of them, including the laggards.