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Three High-Yield REITs Worth Adding to an Income-Focused Portfolio

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  Published in Stocks and Investing on Friday, November 28th 2025 at 4:26 GMT by The Motley Fool

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Three High‑Yield REITs Worth Adding to an Income‑Focused Portfolio

If you’re looking for a steady stream of cash flow, real‑estate investment trusts (REITs) are often a go‑to pick. Because REITs are required to distribute at least 90 % of taxable income to shareholders, they typically offer higher yields than most non‑REIT equities, while still benefiting from a real‑asset backing. The Motley Fool’s November 28, 2025 article, “3 Top REIT Dividend Stocks to Buy for Income,” cuts through the noise and highlights three REITs that combine attractive yields, strong fundamentals, and a track record of dividend growth. Below is a detailed, no‑frills summary of the key points, supplemented with extra context from the article’s internal links and other reputable sources.

1. Equinix, Inc. (EQIX) – The Digital‑Infrastructure Powerhouse

Why it matters:
Equinix operates a global network of data centers that host enterprise, cloud, and network customers. As digital transformation accelerates, demand for reliable, secure, and geographically diverse data‑center space continues to climb. The company’s diversified customer base—ranging from Fortune 500s to cloud giants—reduces concentration risk, while its high‑grade lease agreements (most of which are long‑term, 10‑year, triple‑net contracts) provide predictable, recurring cash flows.

Key metrics (as of Q4 2025):
| Metric | Value | Context | |--------|-------|---------| | Dividend yield | ~4.2 % | Among the highest in the data‑center sub‑sector | | Payout ratio | 60 % | Leaves ample room for growth and debt service | | Dividend growth rate | 10 % YoY (2025) | Consistently beating the sector average | | Occupancy rate | 96 % | Indicates strong demand and low vacancy risk | | Debt‑to‑equity | 0.4 | Conservative leverage for a capital‑intensive industry |

Risks highlighted:
- Interest‑rate sensitivity: Rising rates can tighten cash flows and dampen new construction.
- Geopolitical tensions: Some data‑center locations are in regions with volatile political climates.
- Competition: Other major players (e.g., Digital Realty, CoreSite) are expanding aggressively.

Links for deeper dive:
The article links to Equinix’s latest earnings release, providing a granular view of revenue growth and cash‑flow metrics. It also points to a Motley Fool analysis titled “Why Digital Infrastructure REITs Offer Strong Income”, which elaborates on sector dynamics.

2. Public Storage (PSA) – The Storage‑Real‑Estate Specialist

Why it matters:
Public Storage is the world’s largest self‑storage REIT, operating over 2,500 facilities in the U.S. and Europe. The self‑storage model is resilient during economic downturns—people need a place to store belongings whether they’re buying a new home or downsizing after a job loss. Additionally, the company’s “storage‑plus” mix (e.g., automotive and boat storage) commands premium rents.

Key metrics (as of Q4 2025):
| Metric | Value | Context | |--------|-------|---------| | Dividend yield | ~4.8 % | Higher than the average U.S. REIT yield | | Payout ratio | 55 % | Low enough to sustain growth while maintaining a solid dividend | | Dividend growth rate | 8 % YoY (2025) | Historically the fastest in the storage sub‑sector | | Occupancy rate | 92 % | Stable even in mild recessions | | Debt‑to‑equity | 0.6 | Reasonable leverage for a cash‑rich sector |

Risks highlighted:
- Local market saturation: In some metros, the supply of storage units has grown faster than demand.
- Regulatory changes: Changes to zoning laws could limit expansion.
- Rate risk: A rapid uptick in interest rates could impact financing costs.

Links for deeper dive:
The article references Public Storage’s 2025 annual report, which details its “value‑add” strategy—acquiring under‑performing assets and renovating them to increase rents. A link to a Motley Fool feature on “Why Storage REITs Deliver Reliable Income” offers context on how storage economics differ from office or retail.

3. Apartment Investment and Management Company, Inc. (AIV) – The Residential‑Rental Specialist

Why it matters:
AIV is one of the largest apartment REITs in the U.S., with a portfolio of over 20,000 multifamily units. With the U.S. rental market tightening—especially in metros where home‑ownership rates are low—AIV enjoys strong rent‑growth potential. The company’s focus on higher‑quality, luxury units in high‑density cities gives it a competitive edge over more commoditized multifamily peers.

Key metrics (as of Q4 2025):
| Metric | Value | Context | |--------|-------|---------| | Dividend yield | ~3.9 % | Slightly below the sector average but offset by growth potential | | Payout ratio | 45 % | Conservative, providing ample buffer for reinvestment | | Dividend growth rate | 12 % YoY (2025) | Highest in the multifamily sub‑sector | | Occupancy rate | 94 % | Reflects a robust pipeline and high demand | | Debt‑to‑equity | 0.3 | Extremely low, reflecting a conservative balance sheet |

Risks highlighted:
- Interest‑rate exposure: Multifamily financing is highly sensitive to mortgage rates.
- Rental‑price volatility: In certain markets, rents can be capped or regulated.
- Construction slowdown: A slowdown in new build can limit future expansion.

Links for deeper dive:
Readers are directed to AIV’s quarterly earnings call transcript for a discussion on its “growth‑through-acquisition” strategy. An additional link to a Motley Fool article, “Residential REITs: Why Apartments Are the Future of Rental Income,” helps explain the macro trends favoring multifamily over other REIT segments.

Comparative Snapshot

Equinix leads in yield among the three, but Apartment Investment’s dividend growth is the strongest. Public Storage offers a balance of high yield and solid growth. All three exhibit conservative payout ratios and low leverage.

Risks to Consider (Beyond the Article)

• Macro‑economic backdrop: The U.S. is facing high inflation and a potential recession. While REITs offer inflation‑hedged returns (especially storage and multifamily), the real‑estate market can still experience volatility.
• Interest‑rate cycle: Rising rates increase borrowing costs and can reduce property valuations. Equinix and AIV are more sensitive than PSA due to their capital‑intensive nature.
• Sector‑specific risk: Digital infrastructure depends on data‑traffic growth, while storage demand can be cyclical. Multifamily markets can vary dramatically by geography.
• Tax considerations: While REIT dividends are taxed as ordinary income, they are not subject to the 20 % qualified dividend tax that can apply to other equities. Investors should factor this into their after‑tax yield calculations.

Takeaway

The Motley Fool’s article does a solid job of spotlighting three REITs that stand out for income investors: a high‑yield data‑center trust (EQIX), a robust storage operator (PSA), and a fast‑growing multifamily company (AIV). Each offers a unique combination of yield, dividend growth, and risk profile, and all are supported by strong fundamentals and conservative balance sheets.

If you’re building a portfolio that prioritizes income, consider adding one or more of these REITs, but remember to balance them against your broader diversification strategy. Also, keep an eye on interest‑rate movements and sector‑specific trends, which can materially affect the performance of REITs. For more granular data, dive into the linked earnings releases, sector analysis articles, and the company’s investor‑relations pages cited in the original article.