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The Dow Jones Industrial Average is up 7.8% for the month as we receive more encouraging progress on COVID-19 treatments. The U.S. Federal Reserve has also been doing its part to shield the markets from crashing.
But that doesn't mean some segments of the real estate market haven't changed forever. Today, we're going to show you what are still the best high-yield REITs to buy now - the ones that have kept their head above water.
Our top REIT has a yield of 14% right now...
Retail properties are never going to see the same demand as before the pandemic hit the United States. Lower-end properties were already struggling, and the coronavirus has probably ended their existence.
Big city office space is also going to see drastic changes going forward. Work from home has been an enormous success for many companies. And they are rethinking their need for office space. The combination of the pandemic and civil unrest has many companies considering exactly where they want to be in the future. An exodus from once-hot cities like New York, Seattle, and San Francisco is a genuine possibility.
For REIT investors, all this means is that they must pay attention to what sector of the REIT market they are investing in right now. Mall REITs are not the best choice. And REITs that focus on large urban office markets are probably not the best choice either
Try this REIT instead for a 6% yield...
Industrial REITs Are the Future
Warehouse and shipping space will be needed for e-commerce and shipping companies. This coincides with the slow death of brick-and-mortar retail. More of the things we buy will be delivered right to our door in the future.
Industrial Logistics Properties Trust (NASDAQ: ILPT) is going to benefit from increased demand in industrial real estate. It's a real estate investment trust that owns industrial and logistics properties throughout the United States.
Industrial Logistics owns 301 industrial and logistics properties with 43.8 million rentable square feet. The properties are approximately 98.9% leased to 267 different tenants. The weighted average remaining lease term is about 9.6 years. And 40% of the income generated from these companies comes for the continental United States. Industrial properties in Hawaii generate the remaining 40%.
This company's largest tenants include Amazon.com Inc. (NASDAQ: AMZN), FedEx Corp. (NYSE: FDX), and United Parcel Service Inc. (NYSE: UPS), which all will benefit from increased e-commerce activity. Safeway and BJ's Wholesale Club Holdings Inc. (NYSE: BJ) are large tenants for warehouse space, and the grocery business is not going anywhere anytime soon. In fact, it is one of the few retail businesses that has seen strong sales during the current crisis.
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Industrial Logistics is yielding 6.32% at the current price. It has huge total return potential as increased demand for warehouse and shipping space will keep demand high. That will result in high occupancy rates and rising rents for their properties in the future.
But you could enjoy a 14% yield with this next top REIT...
The Best REIT Right Now
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.