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High-Yield REITs: Is This a Good Risk-Reward Proposition?

Updated: Jan 31

The recent rise in interest rates has made real estate investment trusts (REITs) less attractive to investors. However, some REITs are still offering yields of over 10%, which is tempting to income-focused investors. But are these high yields too good to be true?

Medical Properties Trust: A Pillar of Healthcare Real Estate

Medical Properties Trust (MPW) is a healthcare REIT that specializes in hospital real estate. The company's dividend yield is currently 12%. However, MPW recently cut its dividend in half, and its share price has fallen drastically since January 2022.

Despite these challenges, MPW could be a good investment for long-term investors. The company has a strong track record of managing its debt, and it is well-positioned to benefit from the aging population and the increasing demand for healthcare services.

SL Green Realty Corp: New York's Real Estate at a Crossroads

SL Green Realty Corp (SLG) is the largest office landlord in Manhattan. The company's dividend yield is currently 10%. However, the landscape of New York's real estate market has undergone seismic shifts due to the pandemic. The embrace of remote work has cast a shadow over the demand for office space, putting pressure on landlords like SL Green.

SL Green has shown resilience in the face of these challenges. The company has maintained a steady dividend payout, and it has diversified its portfolio by investing in retail properties and debt and preferred equity. However, the question remains whether SL Green can continue to maintain its high yields in the face of the long-term decline in demand for office space.

Outfront Media: The Advertising Vanguard Facing Digital Transformation

Outfront Media (OUT) is a REIT that specializes in outdoor advertising. The company's dividend yield is currently 11.4

%. However, the advertising industry is notoriously cyclical, and it is facing increasing competition from digital advertising.

Outfront Media has been hit hard by the pandemic, and its dividend payouts have been volatile. The company is investing in digital billboards and data-driven ad solutions to stay competitive, but it is still facing significant challenges.

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The four REITs discussed in this blog all have high yields, but they also come with significant risks. Investors should carefully consider these risks before investing in any of these REITs. JOIN THE ZTRADEZ DISCORD TO DISCUSS FURTEHR

Disclaimer: This is not financial advice

Please note that the information provided in this blog post is for informational purposes only and should not be construed as financial advice. It is important to conduct your own research and consult with a qualified financial advisor before making any investment decisions.


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