Investing in real estate is out of reach for many people, but that does not mean missing out on the industry’s gains. Real estate investment trusts (REITs) have become one of the most appealing vehicles for passive income investors. They offer high yields, trade on major exchanges just like stocks, and operate business models built to withstand higher-for-longer interest rate environments through strong balance sheets and contractual rent escalators.
REITs are required to pay out 90% of their taxable income to shareholders as dividends, which is what makes them such reliable income generators. I am not arguing that REITs are better than stocks across the board. What I do believe is that they provide a practical and low-barrier entry point into real estate for investors who cannot or do not want to purchase property directly. I have held REITs for a decade, and the three below have consistently offered the best balance of yield and reliability.
Federal Realty Investment Trust
Federal Realty Investment Trust (NYSE: FRT | FRT Price Prediction) focuses on open-air shopping centers and mixed-use properties in eight high-barrier metropolitan markets. The REIT carries a dividend yield of approximately 3.9% and holds the longest consecutive dividend-growth record in the entire REIT industry, having raised its quarterly dividend for 58 straight years.
That track record rests on a portfolio of 104 properties encompassing roughly 29 million commercial square feet and about 3,800 tenants. The locations are deliberately chosen: high-income coastal markets from Washington, D.C. to California, where barriers to new supply are steep and tenant demand stays durable through economic cycles. The company has produced consistent net operating income growth and strong re-leasing spreads over the past decade precisely because of this geographic discipline.
The first quarter of 2026 illustrated the model in action. Federal Realty signed 101 leases for roughly 649,000 square feet, marking a first-quarter volume record, with cash rent growth of 13% on re-leased space. Core FFO per share came in at $1.88, a 10.6% year-over-year increase, which led management to raise and tighten full-year 2026 Core FFO guidance to a range of $7.46 to $7.55 per share. Portfolio occupancy stood at 93.8% with a leased rate of 96.1%.
The underlying thesis is straightforward. Long-term leases generate predictable revenue, and assets anchored by grocery stores, fitness centers, and other necessity-driven businesses maintain physical traffic that e-commerce cannot fully replicate. As long as prime locations in affluent markets remain scarce, Federal Realty will have pricing power at lease renewal, and that pricing power is what sustains the dividend growth streak.
Realty Income
Realty Income (NYSE: O) is one of the top dividend REITs to own, with a dividend yield of approximately 5.2%. The company has increased its annual dividend for more than 31 consecutive years, earning it a place in the S&P 500 Dividend Aristocrats index, and recently declared its 673rd consecutive monthly dividend, a streak that has held through the dot-com bust, the financial crisis, and the COVID pandemic.
As of March 31, 2026, Realty Income owned or held interests in 15,571 properties leased to 1,786 clients across 92 industries. The portfolio is dominated by single-tenant, triple-net-leased retail properties, but the company also holds industrial assets and has meaningfully expanded into Europe, with properties now in the U.K. and eight other countries. That breadth limits exposure to any single tenant, geography, or sector.
The business model is built around acquisitions rather than rent bumps alone. In the first quarter of 2026, Realty Income deployed $2.8 billion in new investments at a 7.1% initial cash yield, and management raised its full-year 2026 investment guidance to $9.5 billion from an earlier $8 billion target. A $1 billion joint venture with Apollo for single-tenant retail properties adds another growth channel. With full-year 2026 AFFO guidance of $4.41 to $4.44 per share and Q1 2026 AFFO of $1.13 per share, the 71.7% payout ratio leaves the dividend on firm footing.
Realty Income trades at around $62 per share, and occupancy across the portfolio sat at 98.9% at the end of the first quarter, with a rent recapture rate of 103.4% on re-leased properties. Those numbers signal that tenants are not only staying but paying more when their leases roll. For an income investor, the combination of a near-century-long monthly payout streak and a growing property base across the U.S. and Europe makes this one of the harder REITs to argue against.
Healthpeak Properties
Healthpeak Properties (NYSE: DOC) rounds out this list with a dividend yield of approximately 7.5% and a portfolio centered on healthcare real estate. Its assets include outpatient medical offices, life science facilities, and senior housing, with the medical office and life science segments generating the majority of income and attracting credit-quality tenants tied to long-term structural demand from an aging population.
Healthpeak’s scale received a significant boost when it closed its merger with Physicians Realty Trust for approximately $5 billion, adding 16 million square feet to the portfolio. The company has since refined its focus further. In March 2026, Healthpeak completed the initial public offering of Janus Living, a pure-play senior housing REIT it formed by contributing its senior housing portfolio. The IPO priced at the top of the range, raised approximately $880 million in net proceeds, and was oversubscribed. Healthpeak retained an 81.6% ownership stake, keeping direct exposure to the senior housing upcycle while unlocking capital for reinvestment.
Following the Janus Living IPO and a strong first quarter, Healthpeak raised its full-year 2026 FFO as Adjusted guidance to a range of $1.71 to $1.75 per share. The company also executed $267 million in recapitalizations and dispositions during Q1, including the sale of an 80% interest in a six-property outpatient medical portfolio to Blackstone for roughly $170 million, and repurchased approximately 5.9 million shares for about $100 million. Net debt to Adjusted EBITDAre stood at 5.4x. For passive income investors willing to accept a healthcare-sector concentration, Healthpeak offers a high current yield backed by long-term demographic tailwinds and an increasingly lean balance sheet.
Editor’s note: This article was updated to reflect Q1 2026 results across all three REITs. Federal Realty’s full-year 2026 Core FFO guidance was raised to $7.46 to $7.55 per share following record first-quarter leasing activity, and its consecutive dividend growth streak now stands at 58 years. Realty Income’s consecutive monthly dividend count was updated to 673, its property count corrected to 15,571 as of March 31, 2026, and its $9.5 billion 2026 investment guidance and Apollo joint venture were added. Healthpeak’s dividend yield was revised to approximately 7.5% and additional detail on the Janus Living IPO, including the $880 million in net proceeds and Healthpeak’s retained 81.6% stake, was incorporated.
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