REITs are attracting attention from investors for a variety of reasons. For one, it’s looking increasingly likely that the US will avoid a recession which bodes well for occupancy rates, property values, and home prices. Second, the Fed is in the final stages of its rate hike cycle which means interest rates will go from a strong headwind to a mild tailwind especially if inflation continues to move lower. 

Due to weakness over the past year and a half, REITs are quite compelling from a value perspective while also offering juicy yields to investors. For Benzinga, Kevin Vandenboss identifies 2 REITs that investors should consider buying.

He likes SL Green Realty which is an owner and operator of premium Manhattan commercial real estate property. While many areas of commercial real estate like offices and retail may never recover, SL Green is a bet that premium properties will recover - a historically savvy bet. Currently, the stock yields 8.8% and has a stable payout ratio of 59%, indicating a stable dividend.

Another is Medical Properties Trust which focuses on hospital facilities and has properties in 10 different countries, leading to a diversified portfolio. Also, medical facilities tend to be much more stable than residential or commercial real estate especially given an aging population in most parts of the world. Finally, it also has a dividend yield of 11% and a track record of annual dividend increases. 

Finsum: While REITs have been an underperformer for much of the past couple of years, the sector offers juicy yields and tantalizing upside given recent macro developments.