Power Up Your Portfolio With Preferreds Dividends; Yields +7%

There’s a certain comfort in being treated with priority—boarding early, skipping lines, knowing everything is taken care of. Preferred securities offer a similar experience in your portfolio: income that comes first, with less noise and more stability.

In this article, we explore two preferred shares from stable REITs, designed to give your retirement the kind of preferential treatment it deserves.

Pick 1: GOOD Preferreds – Up To 7.4% Yields

Gladstone Commercial Corporation (GOOD) is an industrial real estate investment trust (REIT) with a portfolio of 141 properties, leased to 107 tenants across 20 different industries. The portfolio's leases had an average remaining term of 6.8 years, offering long-term income visibility. Notably, ~53% of tenants hold an investment-grade or investment-grade-equivalent credit rating, supporting the stability and resilience of their cash flows. The company reported its Q1 earnings on May 7th, reporting core FFO of $0.34/share, flat sequentially, and covering its quarterly dividend of $0.30/share. During the three months of 2025, the REIT collected 100% of all outstanding base rents and ended the quarter. The REIT’s portfolio leases had an average remaining term of 6.8 years, offering long-term income visibility. Notably, ~53% of tenants hold an investment-grade or investment-grade-equivalent credit rating, supporting the stability and resilience of their cash flows.

During the quarter, the company was active in acquisitions, purchasing six industrial properties in Texas, including a five-property industrial portfolio in Houston for $29.3 million with a 10-year lease term, and one industrial property in Dallas-Fort Worth for $44.0 million with an 11.3-year lease term. The total capital deployed for these industrial acquisitions exceeded $73 million, aimed at increasing the REIT's industrial concentration to position itself for the shift in industrial demand resulting from U.S. trade policy.

GOOD reported a 6.6% YoY increase in same-store rents, and the REIT sold one office property for a gain of $377,000. GOOD maintains a 98.4% occupancy of $80.5 million in total liquidity (including $10.4 million in cash balance) with only 2.3% of its total debt maturing this year.

• 6.625% Series E Cumulative Redeemable Preferred Stock (GOODN) – Yield 7.2%

• 6.00% Series G Cumulative Redeemable Preferred Stock (GOODO) – Yield 7.4%

  
  

GOOD’s perpetual preferreds continue to present attractive investments that pay generous monthly dividends. GOODO offers a 7.4% yield and ~23% upside to par.

Pick 2: RLJ Preferreds – Yield 7.9%

The travel industry continues to face headwinds from lower consumer confidence and a visible decline in international travel into the United States. Hotel and hospitality stocks have had a tough year, and the outlook remains one filled with uncertainty for many. Yet, there is one company that is delivering rather steady results due to its asset composition in urban markets, sunbelt regions, and reduced exposure to locations dependent on international tourism.

RLJ Lodging Trust (RLJ) operates a portfolio of 94 hotels with 20,982 rooms, with ~50% of its hotel EBITDA coming from sunbelt markets, and over 2/3rds of its portfolio concentrated in urban markets. Source

Investor Presentation

RLJ reported its Q1 earnings earlier this month, noting that industry headwinds began in March. The hotel REIT achieved YoY RevPAR (Revenue Per Available Room) growth of 1.6%, and delivered EBITDA exceeding the high end of the outlook range. Management noted that less than 3% of the company’s revenues are associated with international travel, and are mostly concentrated in markets such as South Florida, California, and the New York area. RLJ’s Adj. EBITDA for Q1 was $77.6 million, with AFFO/share of $0.31, adequately covering its $0.15/share quarterly dividend.

On the balance sheet side, RLJ addressed all 2025 and early 2026 debt maturities and entered into a new $300 million term loan to refinance a $200 million term loan maturing in early 2026 and repay the $100 million outstanding in its line of credit. This new $300 million term loan matures in 2030.

Investor Presentation

RLJ reported $600 million available under its undrawn corporate revolver, $0.8 billion of liquidity, and $2.2 billion of debt, with a weighted average interest rate of 4.5%, and 75% of it either fixed or hedged. During Q1, RLJ repurchased 2.7 million shares for $24.3 million, and around the end of April, RLJ’s Board approved a new one-year $250 million share repurchase program.

For 2025, RLJ expects RevPAR growth between -1% and 1%, Adj. EBITDA between $332.5 to $362.5 million, and AFFO/share between $1.38 and $1.58. This provides ~250% coverage of the common dividend, allowing the REIT to strengthen its balance sheet further and pursue share repurchases opportunistically as the market continues to maintain a negative outlook for hotels.

• $1.95 Series A Cumulative Convertible Perpetual Preferred Shares (RLJ.PR.A) – Yield 7.9%

  
  

RLJ spends ~$6.2 million every quarter on preferred stock dividends. RLJ-A currently yields 8% and is not callable. This preferred can be converted into common stock if RLJ trades at or above $89.09 for 20 out of 30 trading days. As such, for the preferred stock to become convertible, the common stock has to surge 1100%. We consider this highly unlikely, making RLJ-A a busted convertible that will pay dividends for the foreseeable future.

While RLJ's common stock has taken a beating following the macro shifts in the American economy and consumer habits, its preferreds demonstrated resilience and offer a compelling and well-covered dividend at current prices. This is a well-managed REIT, as evidenced by management actions during and after the COVID-19 pandemic, and the preferreds represent a strong “buy and hold forever” investment.

Conclusion

Preferred securities bring together income, stability, and diversification—qualities that become essential in retirement. At High Dividend Opportunities, we advocate a minimum 40% allocation to fixed income, supported by a portfolio of over 45 preferred shares and 20+ baby bonds. This structure helps reduce volatility and cushions against the emotional swings of the equity markets.

By carefully selecting preferreds from businesses that produce repeatable and reliable cash flows, well in excess of the preferred obligations, investors can tap into steady, lower-risk income that outshines many common stocks and high-yield bonds. In retirement, it's not just about returns—it's about reliability. And preferreds deliver exactly that: preferential treatment not just in structure, but in outcome. This is the beauty of our Income Method, and the joy of income investing.

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