Real Estate Investment Trust REITs have emerged as an efficient diversification strategy to hedge against inflation, offering high dividend yields, strong long-term returns, and liquidity. Unfortunately, higher interest rates tend to make high dividend yields from REITs less attractive when compared to the risk-free rate.
On the other hand, rising interest rates signal economic growth and inflation, which are both positive for REITs. During high inflation environments, real estate owners can charge more in rents, historically causing dividend growth during high inflation. Lastly, economic growth signals higher occupancy rates, enabling REITs to generate more earnings, cash flows, and dividends.
Hersha Hospitality is amongst the non-dividend paying REITs that just reinstated its dividends.
Hersha Hospitality Trust (NYSE:HT) is offering a third-quarter dividend of 5 cents per share annually, with an inconsistent track record of increasing its dividends. Hersha Hospitality is a self-advised real estate investment trust in the hospitality sector, which owns and operates luxury and lifestyle hotels in coastal gateway and resort markets.
The company owns 30 hotels totaling 4,544 rooms, located in New York, Washington, DC, Boston, Philadelphia, Miami, and select markets on the West Coast.
The Hersha Hospitality Board of Trustees has approved a cash dividend of $0.05 per common share and per limited partnership unit for the third quarter ending September 30, 2022.
The Board continues to monitor and evaluate market conditions and, if in the best interests of the company, intends to declare a special cash dividend to holders of common shares and limited partnership units in the fourth quarter of 2022.
Also Read: Companies Froze Dividends In Covid-Stricken 2020: A Few Didn't Bring Them Back. Here's When They Might.
City Office REIT Inc (NYSE:CIO) is offering a dividend yield of 6.90% or 80 cents per share annually, making quarterly payments, with a track record of increasing its dividends once in the past year. City Office REIT is an internally-managed real estate company focused on acquiring, owning and operating high-quality office properties located predominantly in Sun Belt markets.
City Office currently owns or has a controlling interest in 6 million square feet of office properties.
The board of directors authorized a regular quarterly dividend of $0.414 per share of the company's 6.625% Series A Cumulative Redeemable Preferred Stock.
Flickr: Photo From David Woo on flickr