Best REITs to Buy in 2026

What Is a REIT?

A Real Estate Investment Trust (REIT) is a company that owns, operates, or finances income-producing real estate across a range of property sectors. Congress established REITs in 1960 to give everyday investors access to large-scale, diversified real estate portfolios in the same way they might buy shares of a publicly traded company. By purchasing REIT shares on a stock exchange, investors can participate in the economic benefits of commercial real estate ownership without having to buy, manage, or finance properties directly.

To qualify as a REIT under Internal Revenue Code rules, a company must meet several structural requirements. It must invest at least 75% of its total assets in real estate, derive at least 75% of its gross income from rents, interest on mortgages, or real estate sales, and distribute a minimum of 90% of its taxable income to shareholders as dividends each year. This mandatory distribution requirement is what makes REITs attractive to income-focused investors, as it produces dividend yields that typically exceed those of the broader equity market.

REITs give investors exposure to a wide variety of property types including office buildings, shopping centers, warehouses, data centers, cell towers, hospitals, hotels, and apartment complexes. Because they trade on major exchanges, publicly listed REITs offer daily liquidity that direct real estate ownership cannot match. For a deeper introduction to the asset class, see our guide on real estate investment basics.

Types of REITs

Understanding the different categories of REITs is essential before evaluating individual names. Each type carries its own risk profile, income characteristics, and sensitivity to interest rate movements.

Equity REITs

Equity REITs are the most common type. They own and operate income-producing properties, collecting rent from tenants. Revenue comes primarily from lease payments, and the value of the REIT is tied to the appreciation of the underlying real estate. Equity REITs span virtually every property sector, from industrial warehouses and residential apartments to healthcare facilities and retail centers. Most of the individual REITs discussed on this page are equity REITs.

Mortgage REITs (mREITs)

Mortgage REITs do not own physical properties. Instead, they provide financing for income-producing real estate by purchasing or originating mortgages and mortgage-backed securities. Their income comes from the interest earned on these financial assets. Mortgage REITs tend to offer higher dividend yields than equity REITs, but they also carry greater sensitivity to interest rate changes and credit risk. The spread between their borrowing costs and the interest they earn on mortgage assets drives profitability.

Hybrid REITs

Hybrid REITs combine elements of both equity and mortgage REITs, owning physical properties while also holding mortgage loans or mortgage-backed securities. This blended approach can provide diversification within a single holding, though hybrid REITs are less common than their pure-play counterparts.

Public vs. Private REITs

Publicly traded REITs are listed on stock exchanges and can be bought and sold throughout the trading day just like any other stock. They are registered with the SEC and subject to regular disclosure requirements, giving investors transparency into financial performance. Non-traded public REITs are registered with the SEC but do not trade on an exchange, making them less liquid. Private REITs are not registered with the SEC, are available only to accredited investors, and offer the least transparency and liquidity. For most individual investors, publicly traded REITs offer the best combination of accessibility, liquidity, and regulatory oversight.

How We Selected These REITs

The REITs and REIT ETFs featured on this page were selected based on a combination of quantitative screening criteria and qualitative factors. This is an educational overview, not a model portfolio or buy list. The selection methodology considered the following factors:

• Dividend yield and consistency: A track record of reliable, competitive dividend payments relative to the sector average. REITs that have maintained or grown their dividends through multiple economic cycles received favorable consideration.
• Funds from operations (FFO) growth: FFO is the standard measure of REIT operating performance. Consistent year-over-year FFO growth indicates a REIT's ability to generate increasing cash flows from its property portfolio.
• Occupancy rates: High and stable occupancy rates suggest strong demand for a REIT's properties and effective asset management. REITs with occupancy consistently above 90% were prioritized.
• Debt-to-equity ratio and balance sheet health: Conservative leverage is critical in a rising-rate environment. REITs with investment-grade credit ratings and manageable debt loads are better positioned to weather economic downturns and refinance maturing obligations.
• Sector diversification: The list aims to represent multiple property sectors so readers can evaluate opportunities across industrial, retail, healthcare, technology infrastructure, storage, and diversified categories.
• Market capitalization and liquidity: All individual REITs featured have market capitalizations exceeding $10 billion, ensuring adequate trading liquidity for most investors.

Top REITs and REIT ETFs for 2026

The following table summarizes the REITs and REIT ETFs discussed on this page. It is organized by category to help you compare across different property sectors and investment approaches.

Detailed REIT Profiles

Realty Income (O) -- Best Overall REIT

Realty Income is often called "The Monthly Dividend Company" because it pays dividends monthly rather than quarterly, a feature that appeals to income-oriented investors. The company operates as a net-lease REIT, meaning its tenants are responsible for property taxes, insurance, and maintenance costs, which creates a predictable and relatively low-risk income stream for the landlord.

With a portfolio spanning thousands of commercial properties across the United States and Europe, Realty Income is one of the most diversified net-lease operators in the market. Its tenant base includes grocery stores, convenience stores, pharmacies, dollar stores, and industrial operators. The company has increased its dividend more than 120 times since its NYSE listing and holds an A3/A- credit rating, reflecting strong balance sheet management. Realty Income is a component of the S&P 500 index.

• Strengths: Monthly dividend, long track record of dividend growth, investment-grade credit, diversified tenant base
• Considerations: Net-lease REITs are sensitive to interest rate movements; slower growth profile compared to technology-focused REITs

VICI Properties (VICI) -- Best High-Yield REIT

VICI Properties is an experiential net-lease REIT that owns some of the most recognizable gaming, hospitality, and entertainment properties in the United States. Its portfolio includes iconic Las Vegas Strip assets and regional gaming facilities leased to major operators under long-term, triple-net agreements. These lease structures provide highly predictable cash flows with built-in annual rent escalators.

Since its formation in 2017, VICI has grown rapidly through acquisitions and has earned an investment-grade credit rating. The experiential real estate sector benefits from the long-term shift in consumer spending toward experiences over material goods, and VICI's properties are difficult to replicate, providing a natural competitive moat.

• Strengths: Above-average yield, irreplaceable trophy assets, embedded rent growth, investment-grade balance sheet
• Considerations: Concentrated in gaming and hospitality sectors; revenue depends on discretionary consumer spending

Prologis (PLD) -- Best Growth REIT

Prologis is the largest industrial REIT in the world and a dominant force in global logistics real estate. The company owns and manages warehouses, distribution centers, and fulfillment facilities in key logistics hubs across North America, Europe, and Asia. The continued growth of e-commerce and supply chain modernization has been a powerful tailwind for industrial real estate demand.

Prologis benefits from a significant mark-to-market opportunity in its lease portfolio, meaning rents on expiring leases can be reset to substantially higher current market rates. This embedded rent growth supports continued FFO expansion even in periods of slower new development. The company's scale gives it purchasing power advantages and access to favorable debt markets.

• Strengths: Global scale, secular e-commerce tailwind, embedded rent growth from below-market leases, strong balance sheet
• Considerations: Yield is lower than other REITs on this list; new warehouse supply could pressure rent growth in some markets

Vanguard Real Estate ETF (VNQ) -- Best REIT ETF

For investors who prefer broad, diversified exposure to the REIT sector rather than picking individual names, the Vanguard Real Estate ETF is one of the largest and most widely held REIT index funds available. VNQ tracks the MSCI US Investable Market Real Estate 25/50 Index and holds more than 150 REIT securities across all major property sectors.

With an expense ratio of just 0.12%, VNQ provides low-cost access to the entire publicly traded U.S. REIT market in a single ticker. This makes it an efficient choice for investors building a diversified portfolio who want real estate allocation without the concentration risk of individual REITs. For more on the benefits of diversified fund investing, see our guide on dividend investing basics.

• Strengths: Instant diversification, very low expense ratio, high liquidity, automatic rebalancing
• Considerations: Returns will mirror the broad REIT market rather than outperforming it; includes some lower-quality REITs alongside top names

Digital Realty (DLR) -- Best Data Center REIT

Digital Realty is one of the largest data center REITs globally, providing colocation and interconnection solutions across more than 300 facilities on six continents. Data centers have become critical infrastructure in the modern economy, supporting cloud computing, artificial intelligence workloads, streaming services, and enterprise IT operations.

The demand for data center capacity has accelerated as organizations migrate workloads to the cloud and deploy AI training and inference infrastructure. Digital Realty is positioned to benefit from this secular growth trend through its global platform and established relationships with hyperscale cloud providers and enterprise customers.

• Strengths: Secular demand growth from cloud and AI, global platform, long-term contracts, mission-critical facilities
• Considerations: Capital-intensive business model; competition from hyperscale operators building their own facilities; power availability constraints in some markets

American Tower (AMT) -- Communication Infrastructure

American Tower is one of the largest global operators of wireless communication infrastructure, owning and operating tens of thousands of cell towers and related structures. As mobile data consumption continues to grow and 5G networks expand, demand for tower space remains strong. Tower leases are typically long-term agreements with built-in annual escalators, providing predictable revenue growth.

• Strengths: Recurring revenue with contractual escalators, high barriers to entry, 5G expansion tailwind, global diversification
• Considerations: International exposure introduces currency risk; some markets face regulatory uncertainty; tower consolidation could reduce tenant count

Simon Property Group (SPG) -- Best Retail REIT

Simon Property Group is the largest mall operator in the United States, specializing in premium outlet centers and Class A malls in high-traffic locations. While the retail REIT sector faced significant headwinds during the rise of e-commerce, Simon has demonstrated resilience by focusing on high-quality assets and adapting its properties to include experiential retail, dining, and entertainment components.

• Strengths: Dominant market position, high-quality asset portfolio, strong FFO generation, attractive dividend yield
• Considerations: Exposure to retail sector risk; continued e-commerce growth may pressure certain tenant categories

Public Storage (PSA) -- Best Self-Storage REIT

Public Storage is the largest self-storage REIT and one of the most recognizable brands in the sector, with thousands of facilities across the United States. Self-storage has proven to be a remarkably resilient property type across economic cycles, driven by life events such as moving, downsizing, and home renovation rather than broader economic conditions.

• Strengths: Recession-resistant demand drivers, low maintenance capital requirements, pricing power, brand recognition
• Considerations: New supply in some markets could pressure occupancy and rental rates; limited growth avenues compared to other sectors

Alexandria Real Estate Equities (ARE) -- Best Life Science REIT

Alexandria Real Estate Equities is the pioneer and largest owner of collaborative life science, agri-tech, and technology campuses in the United States. Its properties are clustered in leading innovation hubs where proximity to research universities, hospitals, and talent pools drives high tenant demand and long lease durations.

• Strengths: Mission-critical lab space, high switching costs for tenants, long-term leases, exposure to biotech and pharmaceutical growth
• Considerations: Concentrated in a specialized niche; biotech funding cycles can affect tenant demand; higher development risk than stabilized property types

Schwab U.S. REIT ETF (SCHH) -- Low-Cost REIT ETF

The Schwab U.S. REIT ETF offers another cost-efficient way to gain diversified REIT exposure. With an expense ratio of just 0.07%, it is one of the cheapest REIT ETFs available. SCHH tracks the Dow Jones Equity All REIT Capped Index and focuses exclusively on equity REITs, excluding mortgage REITs from its holdings.

• Strengths: Ultra-low expense ratio, pure equity REIT focus, strong diversification, high liquidity
• Considerations: Excludes mortgage REITs, which may limit yield potential; slightly different index composition than VNQ

How to Analyze REITs

Evaluating REITs requires a different set of financial metrics than those used for traditional stocks. Standard earnings-per-share (EPS) figures can be misleading for REITs because depreciation -- a large non-cash expense in real estate -- significantly reduces reported net income. Instead, REIT analysts rely on the following key metrics.

Funds from Operations (FFO)

FFO is the most widely used measure of REIT operating performance. It starts with net income and adds back depreciation and amortization of real estate assets, then subtracts gains (or adds losses) on the sale of properties. FFO provides a clearer picture of cash-generating ability than net income because it removes the distortive effect of depreciation on long-lived real estate assets. The National Association of Real Estate Investment Trusts (Nareit) standardized the FFO definition to ensure comparability across the industry.

Adjusted Funds from Operations (AFFO)

AFFO refines the FFO calculation by subtracting recurring capital expenditures necessary to maintain the quality and value of the property portfolio, such as roof replacements, parking lot resurfacing, and tenant improvement allowances. AFFO also adjusts for straight-lining of rents and other non-cash items. Many analysts consider AFFO a more accurate proxy for sustainable free cash flow and dividend-paying capacity than FFO alone.

Net Asset Value (NAV)

NAV estimates the market value of a REIT's underlying real estate assets, minus liabilities. If a REIT's stock trades below its estimated NAV per share, it may be considered undervalued relative to its property portfolio. Calculating NAV typically involves applying a capitalization rate to the REIT's net operating income and adjusting for debt and other balance sheet items. NAV analysis is particularly useful for evaluating potential acquisition targets and identifying valuation discrepancies.

Capitalization Rate (Cap Rate)

The cap rate is the ratio of a property's net operating income (NOI) to its market value or purchase price. It serves as a quick gauge of expected return on a real estate investment before financing costs. Lower cap rates generally indicate lower perceived risk and higher property values, while higher cap rates suggest higher returns but also higher risk. Comparing cap rates across property types and geographies helps investors understand relative value and risk in different segments of the real estate market. For additional context on evaluating property investments, see our page on REIT investment basics.

REITs vs. Direct Real Estate Investment

Investors seeking real estate exposure face a fundamental choice between buying REIT shares and purchasing physical property. Both approaches offer legitimate paths to building wealth through real estate, but they differ significantly in accessibility, management requirements, risk profile, and liquidity. Understanding these trade-offs is essential for choosing the approach that best aligns with your financial situation and investment goals.

Many experienced investors combine both approaches, using REITs for liquid, diversified real estate exposure in their brokerage or retirement accounts while holding direct property investments for the unique tax advantages and leverage opportunities they provide. There is no single right answer; the best approach depends on your capital, time, risk tolerance, and willingness to manage physical assets. Learn more in our comprehensive guide on real estate investment basics.

Tax Implications of REIT Dividends

REIT dividends receive different tax treatment than qualified dividends from most common stocks, and understanding these distinctions is important for making informed allocation decisions, especially when choosing between taxable and tax-advantaged accounts.

Ordinary Income Treatment

Because REITs distribute most of their taxable income to shareholders, the majority of REIT dividends are classified as ordinary income rather than qualified dividends. This means they are taxed at your marginal federal income tax rate, which can be significantly higher than the preferential 15% or 20% rate applied to qualified dividends. For higher-income investors, this tax treatment can noticeably reduce after-tax returns compared to holding dividend-paying stocks that produce qualified dividends.

Section 199A Deduction

The Tax Cuts and Jobs Act of 2017 introduced a beneficial provision for REIT investors: the Section 199A qualified business income (QBI) deduction. Under this provision, eligible taxpayers can deduct up to 20% of their qualified REIT dividends, effectively reducing the maximum federal tax rate on those dividends from 37% to 29.6% for taxpayers in the highest bracket. This deduction has been a meaningful benefit for taxable REIT investors, though its future availability depends on legislative action, as it is currently set to expire at the end of 2025 unless Congress extends or makes it permanent.

Return of Capital

A portion of REIT distributions may be classified as return of capital rather than ordinary income. Return of capital distributions are not taxed in the year received. Instead, they reduce your cost basis in the REIT shares. This defers taxation until you sell the shares, at which point the lower cost basis results in a larger capital gain. Return of capital treatment can be advantageous from a tax-deferral perspective, but it requires careful record-keeping to track adjusted cost basis over time.

Account Placement Strategy

Because of the ordinary income treatment of most REIT dividends, many tax-aware investors choose to hold REITs in tax-advantaged accounts such as Traditional IRAs, Roth IRAs, or 401(k) plans. In these accounts, REIT dividends either grow tax-deferred (Traditional IRA, 401(k)) or completely tax-free (Roth IRA), eliminating the drag of ordinary income tax rates on compounding returns. If you hold REITs in a taxable brokerage account, the Section 199A deduction can help offset some of the tax disadvantage, but the overall tax efficiency is still lower than holding REITs in a retirement account. For more on building tax-efficient income, see our guide on dividend investing basics.

Tips for Building a REIT Portfolio

If you decide to include REITs as part of your overall investment strategy, the following principles can help you build a well-structured allocation:

• Diversify across sectors: Different property types respond to different economic drivers. Combining industrial, residential, technology, healthcare, and retail REITs can reduce concentration risk and smooth out returns over time.
• Balance yield and growth: High-yield REITs provide current income, while growth-oriented REITs may offer lower starting yields but faster FFO and dividend growth. A blend of both can serve different financial needs across your investing timeline.
• Consider REIT ETFs for simplicity: If you prefer not to analyze individual REITs, a low-cost REIT ETF like VNQ or SCHH provides instant diversification across the entire sector at minimal cost.
• Monitor interest rate sensitivity: REITs, particularly those with higher yields and slower growth, tend to be sensitive to changes in interest rates. Rising rates can increase borrowing costs and make REIT dividends less attractive relative to bonds. Keep this dynamic in mind when setting your allocation.
• Pay attention to balance sheets: Favor REITs with investment-grade credit ratings, manageable debt maturity schedules, and conservative payout ratios. Strong balance sheets provide resilience during economic downturns and access to favorable refinancing terms.
• Reinvest dividends when possible: If you do not need current income, reinvesting REIT dividends through a DRIP (dividend reinvestment plan) can significantly enhance long-term compounding returns.