2 High-Yield REITs to Buy for 5%+ Yields and Growing Dividends

Summary

• NNN REIT offers a 5.2% yield, 99.1% occupancy, and more than 30 years of annual dividend growth.

• Realty Income offers a 5.2% yield, 98.9% occupancy, and an A-rated balance sheet.

• Both REITs continue to grow cash flow despite elevated interest rates.

• Limited new construction and strong tenant demand support the long-term value of high-quality properties.

Realty Income (O) and NNN REIT (NNN) are two of the highest-quality dividend REITs available to income investors today. Both currently yield approximately over 5%, maintain occupancy near 99%, and have increased their dividends annually for more than 30 years.

Real Estate Investment Trusts (REITs) are structurally designed for income investors. By law, they are required to distribute at least 90% of their annual taxable income to shareholders. Yet despite their income potential, REITs remain heavily discounted as elevated interest rates weigh on property values, financing costs, and investor sentiment. 

The same environment creating challenges for REITs could also create opportunities for their strongest operators. Higher financing costs have constrained new construction, making high-quality existing real estate increasingly valuable. Meanwhile, well-managed REITs continue to grow Net Operating Income (NOI) and Funds From Operations (FFO) through contractual rent increases, acquisitions, strategic property dispositions, and disciplined balance sheet management. 

Note: For U.S. investors, ordinary REIT dividends are eligible for a 20% deduction under IRS Section 199A as qualified REIT dividends.

NNN REIT (NNN): 5.3% Yield and 37 Years of Dividend Growth

NNN REIT (NNN) operates a comprehensive portfolio of 3,774 single-tenant properties, leased to over 400 tenants across 50 states. During Q2, the REIT delivered Core FFO of $0.89/share and AFFO of $0.90/share increased 6% and 5.9% YoY, respectively. Annualized Base Rent (ABR) grew 7.3% YoY, an impressive result for a slow-growth REIT, supported by acquisitions and strong occupancy. NNN ended Q2 with 99.1% occupancy and a 10.1-year weighted average lease term across 3,774 properties.

The REIT acquired 89 properties for $291 million at a 7.2% initial cap rate, while disposing of 26 properties for $36.7 million at a 5.6% weighted average cap rate. Management raised its 2026 acquisition guidance to $700–$800 million and increased the midpoint of its disposition guidance to $140 million.

NNN also raised its 2026 AFFO guidance to $3.55–$3.59/share, representing 3.8% YoY growth at the midpoint and a 69% payout for its dividend. The REIT’s balance sheet remains conservatively positioned, with BBB+ credit ratings, 10.1 years of weighted average debt maturity, and $1.4 billion of liquidity.

Realty Income (O): 5.2% Yield From the Monthly Dividend Company

Realty Income (O) is the world’s largest Net Lease REIT. Yet, it continues to expand its growth runway while maintaining its defensive characteristics. During Q2, Realty Income invested $2.6 billion at a 7.3% initial weighted average cash yield, with the majority of the investments made in acquiring U.S. industrial properties.

Realty Income is actively expanding beyond its traditional net-lease operating model, by using its expertise to manage real estate portfolios. Its Core Plus Fund is now fully invested, with over $3 billion in assets, allowing the company to earn management fees by investing institutional capital in lower-yielding, high-quality properties.

O’s operational performance remains excellent, with occupancy at 98.9%, and lease expirations achieving a 102.7% blended rent recapture rate. The REIT’s industrial properties achieved an even stronger 105.8% recapture rate.

O maintains an A-rated balance sheet, with 5.2x net debt-to-adjusted EBITDA and $5.7 billion of pro-forma liquidity. Management raised 2026 AFFO guidance to $4.44–$4.45/share, implying a 73% dividend payout ratio.

Realty Income vs. NNN REIT 

NNN is a pure-play U.S. net-lease REIT, while Realty Income offers greater geographic diversification with a growing presence in the U.K. and Europe. Both maintain investment-grade balance sheets, high occupancy levels, and strong liquidity, but Realty Income is actively expanding beyond traditional net-lease acquisitions through institutional capital and alternative funding platforms, providing additional avenues for growth.

Why REITs Look Attractive in 2026 

REITs remain one of the most attractive income opportunities in today’s market. Blue Chip REITs like Realty Income and NNN REIT Inc. are offering highly defensive 5% yields backed by strong occupancy, rising rents, and disciplined balance sheets. We expect these REIT leaders to continue growing cash flows and dividends to shareholders.

The market may be overlooking REITs, but their earnings are telling a very different story. At High Dividend Opportunities, we focus on owning the highest-quality income investments, for reliable income generation in retirement. When the market sees headwinds, we look for opportunities—and today, I smell opportunity in REITs.