4 Office REITs Paying Dividends Despite the Slump. Which Are Safest?
Remote work, looming lease expirations, and costly refinancing hang over office landlords, yet some still pay out yields up to 6%. We tested four dividends against cash earnings to see where the cushion is thick and where one thin payout…
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Office landlords are still fighting remote and hybrid work, a steady wave of lease expirations, and debt that is refinancing at much higher rates. Even so, the best buildings are filling up. BXP (NYSE:BXP), the company formerly known as Boston Properties, raised total portfolio occupancy by 100 bps to 89.4% in the third quarter. That was its fourth consecutive quarterly gain. The four names below are all equity REITs, meaning they own and lease physical office buildings. They are not mortgage REITs, so they avoid the interest-rate and credit risk that comes with holding a loan book. Dividend safety is measured on FFO, the standard REIT cash-earnings measure, rather than on GAAP earnings, because GAAP figures for these companies are distorted by depreciation and impairments.
BXP: Strongest FFO Coverage After a Reset Dividend
Its portfolio: Premier central business district (CBD) towers in Boston, New York, Washington, D.C., San Francisco and Seattle. The portfolio includes Prudential Center, Embarcadero Center, Reston Next, Madison Center and the GM Building. The CBD portfolio is 91.8% occupied and 94.1% leased.
Demand background: Management said premier workplaces have direct vacancy of 8%, compared with 13% for the broader office market. BXP signed about 1.2M sq ft of leases in the quarter with a 10.3-year weighted-average term. Second-generation net rents rose 9.33%.
Yield and coverage: The quarterly dividend is $0.70, or $2.80 a year. At $64.68, that works out to a yield of about 4.3%. Third-quarter adjusted FFO was $1.89 per share, so the payout used roughly 37% of FFO. That cushion exists partly because the dividend was cut from $0.98 per quarter in 2025. Funds available for distribution (FAD), which subtracts leasing costs and capital spending from FFO, gives a tighter picture. The FAD payout ratio reached 140.25% in the first quarter. Management expects free rent to burn off and said “the AFFO will be improved” in 2027.
Bull case: FY2026 FFO guidance was raised to $7.06-$7.08 per share. The development pipeline totals $2.94B and is 70% leased, and management expects occupancy to end the year near 90%.
Risk: Refinancing costs are climbing. New notes carry a 6.050% coupon, compared with 2.750% on the debt they replaced. The $2.3 billion GM Building mortgage, now at 3.6%, matures in June 2027. S&P’s outlook on BXP’s unsecured notes is negative (BBB).
Cousins Properties: Sun Belt Trophy Towers With a Rock-Steady Payout
Its assets: Cousins Properties (NYSE:CUZ) owns Class A office in Atlanta, Austin, Charlotte, Dallas, Houston, Nashville, Phoenix, and Tampa. Austin generates 36.1% of NOI and Atlanta 31.3%.
Demand background: Third-quarter second-generation cash rents rose 19.8%, the strongest result in five years, extending the company’s run of 50 consecutive quarters of positive rent roll-ups. Same-property cash NOI increased 7.4%. The portfolio was 93% leased with weighted average occupancy of 89.5%. The CEO at the time of the call, Colin Connolly, said: “The net result for Cousins is an emerging shortage of premier lifestyle office space in the best submarkets of the Sun Belt.”
Yield and coverage: Cousins has paid $0.32 per share in each quarterly distribution from January 2023 through October 2026, or $1.28 a year. At $29.48, the yield is about 4.3%. FY2026 FFO guidance was raised to $2.95-$2.99 per share. At the $2.97 midpoint, the dividend uses about 43% of FFO.
Bull case: Only 4.6% of leased space expires through the end of 2027, and 94% of consolidated debt is unsecured. The stock is up 20.07% year to date.
Risk: Cousins is moving into ground-up development. It holds a 97.5% equity interest in an Uptown Dallas site planned for a tower of about 700,000 square feet, and final costs and pre-leasing remain uncertain. Austin has also produced impairments, including one on One Eleven Congress.
Kilroy Realty: Highest Yield, Biggest Recovery Story
Its assets: Kilroy Realty (NYSE:KRC) owns office and life science space in the San Francisco Bay Area, Los Angeles, San Diego, Seattle, and Austin.
Demand background: Kilroy leased about 815,000 square feet in the third quarter. Cash re-leasing spreads were up 9.7%. Earlier in the year, cash rents on second-generation leases fell 16.8% in the first quarter. AI tenants account for roughly 40% of demand in San Francisco. Occupancy is still low at 76.9%, compared with a leased rate of 83.0%.
Yield and coverage: The $0.54 quarterly dividend comes to $2.16 a year. At $35.99, the yield is about 6.0%, the highest in this group. Third-quarter FFO was $0.88 per share, so the payout used about 61% of FFO. On FAD, margins are thinner. Management said that without one large upfront payment, the FAD payout ratio “would have been kind of in the mid-80% range.”
Bull case: Kilroy has more than 1.4 million square feet of leases that are signed but have not yet started. Those leases carry nearly $101 million of annualized base rent.
Risk: DIRECTV is expected to vacate or sharply reduce 484,000 square feet in late 2027. In addition, once capitalization on the Flower Mart project stops, Kilroy faces about $37 million a year in added interest and operating costs.
SL Green Realty: Manhattan Momentum, Thinnest Cushion
Its assets: SL Green Realty (NYSE:SLG) is Manhattan’s largest office landlord.
Demand background: SL Green has leased more than 2 million square feet so far this year and is now at 95% leased occupancy. Its leasing chief said Manhattan supply is “tight as a drum.”
Yield and coverage: In 2026, SL Green replaced its monthly $0.2575 payment, which annualized to $3.09, with a quarterly $0.6175, or $2.47 a year. At $50.93, the yield is about 4.8%. The most recent reported per-share FFO, $0.84 for the first quarter, implies a payout of about 74% of FFO. Coverage there is the weakest of the four.
The upside: The CFO expects 2027 same-store cash NOI growth to be “north of 10%.”
Risk: Higher interest rates cut $0.25 from second-half results, and total debt rose to $4.45B.
Which Office Dividends Look Most Durable
On FFO coverage, BXP and Cousins have the most room behind their dividends. Cousins also has the cleanest balance sheet and a payout that has held at $0.32 for nearly four years. Kilroy’s roughly 6.0% yield depends on leases that are signed but not yet paying, the kind of setup that shows up in our free guide to the seven warning signs a big yield is about to be cut. SL Green’s tighter coverage makes its Manhattan leasing gains the key test of whether the dividend holds.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
