High-Yielding REITs: Three Dividend Growth Champions Worth Holding Long-Term

Understanding the Power of Dividend Growth

When it comes to passive income, real estate investment trusts (REITs) have quietly outperformed many traditional equity investments. According to data from Ned Davis Research and Hartford Funds, S&P 500 dividend payers have beaten non-dividend stocks by a margin exceeding 2-to-1 over the past five decades. The real winners, however, are companies that consistently raise their payouts year after year.

The REIT sector stands out as a treasure trove of high-yielding dividend growth opportunities. These funds distribute substantial and steadily increasing dividends, making them perfect candidates for buy-and-hold portfolios seeking reliable long-term cash flow.

Rexford Industrial Realty: Growth in a Tight Market

Rexford Industrial Realty (NYSE: REXR) takes a focused approach to industrial real estate, concentrating exclusively on Southern California’s booming logistics market. With 420 properties spanning 51 million square feet, the company operates in one of the world’s most dynamic industrial zones.

What makes Rexford compelling is the favorable market dynamics. Southern California’s industrial sector enjoys robust demand paired with constrained supply. This environment supports consistently high occupancy and accelerating rent growth. New leases signed recently averaged 23.9% above prior rates, with embedded annual growth of 3.6%.

The dividend reflects this operational momentum. Over the past five years, Rexford has expanded its payout at an impressive 15% compound annual rate. The current yield stands at 4.2%. With a strong balance sheet backing further acquisitions and development projects, dividend increases appear sustainable.

Extra Space Storage: A Decade of Consistent Payout Growth

Extra Space Storage (NYSE: EXR) dominates the U.S. self-storage sector, commanding roughly 15.3% market share. The company operates or manages nearly 4,200 facilities totaling over 322 million rentable square feet.

EXR’s portfolio structure creates multiple revenue streams. It owns 48% of properties directly, maintains interests in 11% through joint ventures, and manages the remaining 41%. This mix generates both steady rental income from owned assets and predictable management fees from third-party properties.

The company has strategically grown through acquisitions, joint venture expansion, and a third-party management platform. A major milestone came with the $15 billion acquisition of Life Storage in 2023. These investments have powered a remarkable achievement: dividend increases exceeding 110% over the past decade. The current yield surpasses 6%.

Extra Space’s financial strength and development pipeline suggest dividend growth will continue. The company’s bridge lending platform, which finances self-storage developers, creates opportunities to acquire completed projects at attractive valuations. This structural advantage has delivered impressive results—total returns of 2,400%+ over 20 years rank third among REITs.

Realty Income: 112 Consecutive Quarters of Rising Dividends

Realty Income (NYSE: O) operates at a much larger scale, ranking as the world’s sixth-biggest REIT. The company’s portfolio spans over 15,000 retail, industrial, gaming, and other assets across the U.S. and Europe.

Realty Income’s competitive edge lies in its net lease structure. Tenants bear all operating expenses—maintenance, property taxes, insurance—creating exceptionally stable cash flows for the landlord. This reliability has enabled an extraordinary track record: 112 consecutive quarterly dividend increases at a 4.2% compound annual growth rate spanning three decades.

The current 5.7% yield reflects this stability, and the growth trajectory suggests continued expansion. Realty Income’s fortress balance sheet ranks among sector-best, while the addressable market for global net lease real estate exceeds $14 trillion. With this enormous opportunity ahead, dividend increases appear well-supported for years to come.

The Verdict on Long-Term REIT Investments

REITs represent among the most reliable vehicles for perpetual dividend income. Extra Space Storage, Realty Income, and Rexford Industrial Realty have demonstrated decades of commitment to increasing shareholder payouts. Their strong fundamentals, ample growth opportunities, and proven track records position them as ideal holdings for investors seeking durable, growing passive income streams.

For those serious about building lasting wealth through dividends, these three merit serious consideration.