Dividends start to rise at commercial REITs
NEW YORK – Nov. 22, 2010 – Some of the country’s biggest real estate investment trusts, ranging from Simon Property Group Inc. to Kimco Realty Corp. to Nationwide Health Properties Inc., raised their quarterly dividends this month.
More commercial property companies are expected to follow suit in the weeks and months to come. The higher quarterly payouts reflect the better occupancy levels and higher rents, which are boosting the income pool for dividends.
That is a stark contrast from the last few years, when REITs were busy slashing or suspending dividends to preserve cash and ride out the recession. Since the first of this year, dozens of REITs have reversed course.
Brad Case, vice president of research and information at the National Association of Real Estate Investment Trusts, confirms, “The operating fundamentals in commercial real estate seem to be getting better in the major markets in general.” This week, he will make his bullish case about real-estate stocks at the REIT World conference in New York.
While conditions are indeed improving, dividends still are not as lucrative as they were at the height of the market in 2005 and 2006. Mike Kirby, director of research for Green Street Advisors, reasons that most REITs are trying to be conservative.