Real estate investment trusts (REITs) are great sources of monthly income, and the best of the best tend to grow their distributions over time. Let’s take a closer look at two that just raised their rates by 2-5%, so you can determine if you should invest in one of them today.
Agellan Commercial Real Estate Investment Trust
Agellan Commercial Real Estate Invtmt TR (TSX:ACR.UN) has ownership interests in a portfolio of 44 income-producing office, industrial, and retail properties located in major urban markets in the United States and Canada that total approximately seven million square feet as of September 30.
In a press release on November 28, Agellan announced a 4.5% increase to its monthly distribution to $0.0675 per unit, equating to $0.81 per unit annually, which brings its yield up to about 6.8% at the time of this writing.
Foolish investors must also make the following two notes.
First, this increase is effective for Agellan’s January 2018 distribution, which is expected to be payable in February 2018.
Second, this is the first time the REIT has raised its distribution since it went public in 2013, and I think its strong financial performance and its rapidly growing property portfolio could allow 2018 to mark the starting point to an extensive streak of annual increases.
Allied Properties Real Estate Investment
Allied Properties Real Estate Investment (TSX:AP.UN) owns and manages a portfolio of 157 urban office properties located across major cities in Canada and the United States that total approximately 11.82 million square feet of gross leasable area as of September 30.
In a press release on December 6, Allied announced a 2% increase to its monthly distribution to $0.13 per unit, equating to $1.56 per unit annually, which brings its yield up to about 3.7% at the time of this writing.
It’s important to make the following two notes.
First, the first payment at this increased rate will be made on January 15 to unitholders of record on December 31.
Second, this hike puts Allied on track for 2018 to mark the seventh consecutive year in which it has raised its annual distribution, and I think its consistently strong financial performance will allow this streak to continue in 2019 and beyond.
Which should you buy today?
When including reinvested dividends, Agellan has returned more than 63% since I first recommended it on July 13, 2015, and Allied has returned more than 28% since I first recommended it on June 24, 2015. I think both are still great buys today, so take a closer look and consider adding one of them to your portfolio.
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Fool contributor Joseph Solitro has no position in any stocks mentioned.