Investing in REITs: Real Estate Investment Trusts, 4th Edition

The Virtues of Blue-Chip REITs

So far, we've discussed growth, value, and bond-proxy REITs. Now I'll introduce the stalwarts of REITdom—the blue-chip REITs. But first, a caveat: There is no objective or commonly accepted definition of “blue-chip REIT,” so you will have to accept mine until you develop your own. Blue-chip REITs are, like all REITs, subject to the ups and downs of their sector's cycles but should, over reasonably long time periods, deliver consistent, rising, long-term growth in FFO, dividends, and asset value. Because they are financially strong and widely respected, they will, in most periods, have access to the additional equity and debt capital that can fuel above-average growth. They will rarely provide the highest dividend ...