Major economies are clouded by economic uncertainty due to the trade war initiated by the U.S. under President Donald Trump. Recessionary fears are back as Canadians brace for the impact of tariffs, including a downward pressure on economic growth.
Preparation is key to counter a possible financial crunch until trade disputes end. Canadians can generate passive income by investing in real estate investment trusts (REITs). Thus far in 2025, the TSX’s real estate sector, which includes REITs, has shown steady performance.
H&R REIT (TSX: HR.UN) and Crombie REIT (TSX: CRR.UN) are cash machines if you need to create one. Besides the hefty dividend yields, the payout frequency is monthly, not quarterly. You can incorporate the cash dividends into your monthly budgets. Furthermore, the stock prices are less than $20 per share.
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Simplified, growth-oriented business
H&R is repositioning for growth as it aims to become Canada’s leading owner, operator, and developer of residential and industrial properties. If you invest today, HR.UN trades at $11.69 per share. Current investors enjoy a +30.34% market-beating year-to-date gain on top of the 5.17% dividend yield.
Management’s transformational strategic repositioning plan started in 2021. Around 71% of the total portfolio consists of high-quality grocery-anchored, single-tenant properties. The $3 billion REIT also owns prime, income-producing residential properties in high-growth U.S. gateway and sunbelt cities.
H&R’s ongoing strategy is to create a simplified, growth-oriented business. The focus on residential and industrial properties should create sustainable long-term value for investors. As market conditions permit, the sale of office and retail properties will proceed.
In the first quarter (Q1) of 2025, same-property net operating income increased 4.4% year over year to $126.45 million. At the quarter’s end, the occupancy rate was 95.6%. H&R believes in its long-term strategy and is happy with the progress of the strategic repositioning plan. However, a potential transaction or sale to a prospective buyer is possible if it serves the best interests of the REIT.
A special committee of independent Trustees was formed in February 2025 to review and consider strategic alternatives after H&R received an unsolicited expression of interest.
Solid foundation
Crombie remains resilient due to its diversified, defensive property portfolio as well as solid backing from anchor tenant Empire Company. The food retailer giant has a 41.5% ownership stake in the $2.76 billion national retail property landlord.
As of this writing, CRR.UN outperforms the TSX year to date at +16.18% versus +12.91%. At $14.80 per share, the dividend offer is 5.99%. A $7,000 investment, equivalent to the 2025 Tax-Free Savings Account (TFSA) annual limit, will generate nearly $35 in tax-free monthly income.
Around 83% of Crombie’s portfolio (297 investment properties) are grocery-anchored, necessity-based retail properties. The weighted average lease term (WALT) is eight years, while the committed occupancy is 97.2%. Moreover, 29% of the leases will mature over the next five years. A major development pipeline for long-term value creation includes 11,600 residential units.
In the first half of 2025, property revenue and net property income increased 4.9% and 6.7% year over year to $246.5 million and $158.5 million, respectively. Expect Crombie to deliver consistent long-term earnings and cash flow stability in the years to come.
Financial cushion
H&R and Crombie are suitable for laid-back investors seeking extra income or a financial cushion. The cash machines are also wealth-builders under normal economic conditions.
