Three REITs Delivering Consistent Dividend Growth for Patient Investors

Why Income-Focused Investors Should Consider Real Estate Investment Trusts

Over the past five decades, dividend-paying equities in the S&P 500 have significantly outperformed their non-dividend-paying counterparts—more than doubling returns according to research from Ned Davis Research and Hartford Funds. However, not all dividend stocks are created equal. The most impressive wealth-building results have come from companies with a track record of steadily raising payouts year after year. The real estate investment trust (REIT) sector stands out as particularly attractive for this strategy, with numerous opportunities offering both substantial current yields and reliable payout growth over decades.

Rexford Industrial Realty: A Concentrated Bet on High-Growth Markets

Rexford Industrial Realty (NYSE: REXR) exemplifies the power of focused strategy. Narrowing its attention exclusively to Southern California’s industrial real estate market, the company operates 420 facilities spanning 51 million square feet. This region represents one of the globe’s most dynamic industrial hubs, characterized by constrained inventory and robust tenant demand.

The tight supply-demand dynamics translate directly into pricing power. Recent lease renewals averaged 23.9% above previous rates, with an embedded 3.6% annual rental growth escalator built in. By combining organic rent growth with strategic acquisitions and redevelopment initiatives, Rexford has accelerated its distribution expansion at a compound rate of 15% annually over the past five years—among the fastest in its peer group. The REIT currently distributes a 4.2%-yielding payout, with a fortress balance sheet positioning it to sustain aggressive dividend hikes as occupancy remains elevated and market tailwinds persist.

Realty Income: Unmatched Consistency in Dividend Growth

Realty Income (NYSE: O) ranks as the world’s sixth-largest REIT by capitalization. What truly sets it apart is an extraordinary dividend track record: 112 consecutive quarterly increases. This represents three decades of uninterrupted payout expansion, growing distributions at a 4.2% compound annual rate.

The company achieves this reliability through a diversified portfolio exceeding 15,000 properties—retail locations, industrial facilities, gaming venues, and others—spread across the U.S. and European markets. The foundation of this stability rests on its strategic focus on net-lease arrangements, where tenants assume responsibility for maintenance, property taxes, and insurance. This cost-transfer mechanism ensures predictable, rising cash flows even during economic uncertainty.

Currently yielding 5.7%, Realty Income’s distributions have powered a 13.7% compound annual total return for shareholders. The addressable market opportunity remains vast—an estimated $14 trillion in global net-lease real estate—providing runway for continued portfolio expansion and corresponding dividend increases. A best-in-class balance sheet further underscores management’s capacity to fund growth while elevating shareholder payouts.

Extra Space Storage: Consistent Dividend Elevation Through Scale

Extra Space Storage (NYSE: EXR) commands the dominant position in U.S. self-storage, controlling or managing approximately 4,200 facilities representing 322 million rentable square feet—roughly 15.3% of the entire national supply. Its structure is strategically diversified: direct ownership of 48% of properties, joint venture interests in 11%, and third-party management of the remaining 41%.

This multi-pronged model generates layered income streams. Owned assets produce escalating rental revenue, while managed facilities deliver stable management fees. Over the past decade, the company has elevated its dividend payout by exceeding 110%, reflecting its success in growing earnings through acquisitions, joint venture expansion, and organic portfolio development. Notable transactions include the 2023 acquisition of Life Storage for $15 billion. The company currently yields more than 6%.

Extra Space’s growth trajectory remains compelling. With a resilient balance sheet and consistent access to capital, the REIT continues acquiring self-storage assets from joint venture partners and third-party operators, funding development through its proprietary bridge lending platform, and purchasing completed projects upon maturation. These multiple expansion vectors support continued dividend elevation. Cumulatively, this strategy has generated extraordinary long-term returns—a 2,400%+ total return over two decades, ranking third among all REITs historically.

The Case for Buy-and-Hold REIT Dividend Strategies

These three REITs—Extra Space Storage, Realty Income, and Rexford Industrial Realty—demonstrate that disciplined dividend growth investing within the real estate sector can produce multi-decade wealth accumulation. Each has established credible track records of consistent payout elevation, operates with fortress-like financial flexibility, and operates within growing addressable markets. For investors seeking predictable income streams that expand over time, this category merits serious consideration as a foundational holding for long-term portfolios.