Long-Term Dividend Growth: Three REIT Powerhouses Worth Your Portfolio

Why REITs Excel as Dividend Investments

The real estate investment trust sector has established itself as a premier source for reliable, growing income streams. Over the past five decades, dividend-paying stocks within the S&P 500 have consistently outperformed their non-dividend-paying counterparts by a significant margin—approximately 2:1, according to research from Ned Davis Research and Hartford Funds. Among these dividend generators, REITs stand out for their mandate to distribute earnings, making them particularly attractive for buy-and-hold investors seeking passive income that compounds over time.

Three REIT Champions Leading the Dividend Growth Race

Realty Income: The Dividend Aristocrat

Realty Income (NYSE: O) holds the distinction of being the world’s sixth-largest REIT, commanding a portfolio exceeding 15,000 properties spanning retail, industrial, and gaming sectors across the U.S. and Europe. What truly sets this company apart is its unparalleled dividend consistency: 112 consecutive quarters of dividend increases represent an extraordinary track record in corporate America.

The company’s investment strategy centers on net lease properties, where tenants bear all operating expenses. This arrangement ensures remarkably stable cash flows regardless of economic conditions. Through disciplined portfolio expansion and reinvestment, Realty Income has grown its dividend at a 4.2% compound annual rate over three decades. The current dividend yield stands at 5.7%, while the company’s total return to shareholders has reached an impressive 13.7% compound annual average.

With a massive $14 trillion addressable market in global net lease real estate and one of the sector’s most robust balance sheets, Realty Income possesses the financial firepower and runway to sustain dividend growth indefinitely.

Rexford Industrial Realty: The High-Growth Option

Rexford Industrial Realty (NYSE: REXR) takes a concentrated approach, focusing exclusively on Southern California’s industrial real estate market. Managing 420 properties totaling 51 million square feet, the company capitalizes on a region characterized by intense demand and constrained supply—dynamics that support consistently elevated occupancy rates and strong rent expansion.

The numbers tell a compelling story. Recently executed leases have commanded rates 23.9% higher than preceding agreements, with embedded annual growth clauses averaging 3.6%. This leasing momentum translates directly to financial performance: Rexford has expanded its dividend at a 15% compound annual rate over the past five years, substantially outpacing the broader REIT sector.

The company’s strategic approach—combining disciplined capital deployment through redevelopment initiatives and acquisitions with strong balance sheet management—positions it to sustain aggressive dividend escalation. Current yield of 4.2% provides an entry point for investors seeking both income and appreciation.

Extra Space Storage: The Dividend Acceleration Leader

Extra Space Storage (NYSE: EXR) dominates the U.S. self-storage market with a 15.3% share, operating or managing approximately 4,200 facilities encompassing over 322 million square feet. The company’s diversified operating model—owning 48% outright, maintaining joint venture stakes in 11%, and managing 41%—generates revenue across multiple channels: owned properties produce escalating rental income while managed assets yield consistent fee-based returns.

Over the past decade, Extra Space Storage has increased its dividend payout by more than 110%, with the current yield exceeding 6%. This capability stems from disciplined expansion: the company systematically acquires properties, develops joint ventures, and grows its third-party management platform. The 2023 acquisition of Life Storage for $15 billion exemplified this growth trajectory.

Impressive financial results validate this strategy: Extra Space Storage has delivered total returns exceeding 2,400% over two decades, ranking third among all REITs. A fortress balance sheet provides the capital flexibility needed to fund ongoing acquisitions, while the proprietary bridge lending platform supporting self-storage development creates additional income opportunities and growth optionality.

The Case for Forever Holding

These three REITs represent different expressions of the same fundamental investment thesis: disciplined management, strong market positions, and demonstrated commitment to dividend growth. Historical performance across different economic cycles validates their resilience, while forward-looking fundamentals suggest the dividend expansion trajectory remains intact.

Investors seeking meaningful, growing income streams with long-term appreciation potential will find compelling value in companies that have proven their capacity to increase shareholder payouts through multiple market environments. The REIT sector, exemplified by these three leaders, offers precisely this combination—making them ideal components of a permanent portfolio.