3 REITs Poised to Gain From 4.2% Inflation as CPI-Linked Leases Lift Rents
Updated
Updated · The Motley Fool · Jun 26
3 REITs Poised to Gain From 4.2% Inflation as CPI-Linked Leases Lift Rents
3 articles · Updated · The Motley Fool · Jun 26
Summary
Gladstone Land, Vici Properties and W.P. Carey were highlighted as REITs positioned to benefit from May’s 4.2% inflation rate because large portions of their leases automatically raise rents.
23.5% higher energy costs helped push inflation to a three-year high after the Strait of Hormuz closure disrupted trade, making CPI-linked rent escalators more valuable for landlords with long-term net leases.
Gladstone owns 144 farms and pairs annual escalators with revenue-sharing leases; its dividend yields nearly 6.5% and has been raised 35 times over the past 45 quarters.
Vici gets 45% of rent from CPI-linked leases today, rising to 87% by 2035, while W.P. Carey gets about 49%; both use that inflation protection to support dividend yields above 5%.