Retail REIT Showdown: Why These Two Dividend Giants Keep Winning in Tough Times

2025-12-31 13:50:15

If you’re hunting for steady dividend income, retail REIT stocks are back on the menu—and investors who wrote them off are leaving money on the table.

Here’s the reality check: Retail REITs got absolutely hammered during the pandemic (hello, e-commerce fears) and again in 2022-2023 when interest rate hikes made property acquisitions way more expensive. Yet somehow, the survivors managed to thrive. For the first nine months of 2025, retail-focused REITs returned 6.9% on average, per the National Association of Real Estate Investment Trusts.

Two major players dominating this space are Realty Income and NNN REIT—both own thousands of retail properties and have been crushing it for decades. But they play the game differently.

The Numbers That Matter

Realty Income operates 15,540+ properties and pulls roughly 80% of rent from retail, anchored by heavy hitters like Dollar General, Walgreens, Home Depot, and Walmart. That massive scale means:

98.7% occupancy rate (basically a ghost town’s opposite)
3.5% bump in lease renewal rates
AFFO per share jumped 2.9% YoY to $1.09
Dividend yield sits at 5.7%, paid monthly
Covers its annualized $3.23 per-share dividend with projected $4.25-$4.27 AFFO this year

NNN REIT is the leaner operator with 3,700 properties spread across convenience stores, auto services, restaurants, and entertainment venues. The lighter footprint means:

97.5% occupancy (just as impressive)
Quarterly AFFO per share rose from $0.84 to $0.86
5.9% dividend yield—slightly higher than Realty Income
36-year dividend streak, with an August 3.4% hike to $0.60 per share
Projected $3.41-$3.45 AFFO coverage to support payouts

Why Retail REITs Didn’t Die (And That Matters)

The key insight most people missed: Both companies invested in businesses that laugh at economic volatility. Groceries, convenience stores, dollar stores—people still need these regardless of whether there’s a recession brewing or stocks are rallying. That’s not boring; that’s smart.

Realty Income’s three-decade streak of annual dividend increases and NNN REIT’s 36-year track record prove these aren’t flash-in-the-pan operators. They’ve survived recessions, pandemic chaos, and interest rate carnage.

The Real Trade-Off

Realty Income’s massive size is both a strength and a constraint. With 15,000+ properties already in the bag, finding new investments that’ll move the needle becomes harder. You’re getting stability and diversification, but expect slow, steady returns.

NNN REIT’s smaller scale is its secret weapon. New property investments can still meaningfully impact growth metrics at this stage. Less diversification? Sure. But more room to run? Absolutely.

Making Your Move

Both deliver similar dividend yields (5.7% vs. 5.9%), rock-solid occupancy rates, and decades-long dividend track records. The choice depends on your appetite: Want the established fortress of Realty Income, or the nimbler growth potential of NNN REIT?

The verdict? NNN REIT edges out as the play if you’re banking on growth potential—assuming you’re comfortable with slightly less diversification. But Realty Income won’t disappoint if you’re after predictable, boring (in the best way) income.

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