Realty Income Corporation, known as “The Monthly Dividend Company,” has a portfolio of over 6,000 properties. The company acquires and manages retail and commercial real estate under long-term net lease agreements. This gives investors predictable cash flows and regular dividend payments.
Essential Properties Realty Trust focuses on sale-leaseback transactions with middle-market companies. They invest in single-tenant operational properties. This creates a diversified portfolio that minimizes risk while providing a stable income stream for retirees.
For income investors, portfolio allocations often favor value investments like midstream infrastructure, equity REITs, and blue-chip cash cows. These typically offer yields between 5% to 8%. While long-term alpha-like returns are unlikely with these assets, they provide stable income streams suitable for defensive retirement portfolios.
Realty Income’s predictable cash flows
Some investors may want to combine high yield with growth-like exposure. Although the yield itself will be more volatile in this situation, it could be an interesting way to enhance the total profile of the portfolio.
Closed-End Funds (CEFs) that focus on real assets like real estate and infrastructure can provide stable, inflation-adjusted income for retirees. IGR, JRI, and AWP have delivered strong returns in 2024. However, current prices suggest now might be a time to hold rather than buy, due to potential market pressures.
The biggest risk to these funds is renewed inflation, which could lead to higher interest rates. This scenario could negatively impact real assets and cause downward price trends. While these CEFs have shown promise, potential investors should be cautious about market conditions and interest rate risks.
It may be wise to wait for prices to drop before adding them to a portfolio.
