24 US REITs, 2 Canadian REITs raise dividend payouts in February

This Data Dispatch is updated monthly. The analysis includes publicly traded real estate investment trusts covered by S&P Global Market Intelligence that are based in the US or Canada and trade on the NYSE, Nasdaq, NYSE American, Toronto Stock Exchange or TSX Venture Exchange.

Twenty-four publicly traded real estate investment trusts (REITs) based in the US declared increases to their regular dividends in February, boosting the total of US REITs that have announced higher dividends in the first two months of 2024 to 27, according to data compiled by S&P Global Market Intelligence.

In Canada, two REITs announced dividend increases during the month.

Park Hotels leads dividend growth in February

Hotel landlord Park Hotels & Resorts Inc. disclosed the biggest dividend hike in February, raising its quarterly cash payout by 66.7% to 25 cents per share.

In addition to its regular quarterly dividend rate, Park Hotels typically pays out a larger top-off dividend in the fourth quarter of each year. In 2023, the REIT paid a quarterly dividend of 15 cents per share, along with a special dividend of 78 cents per share in the fourth quarter, for a total of $1.38 per share for the year.

In the company's earnings release on Feb. 27, Chairman and CEO Thomas Baltimore Jr. said that "2023 was a year of outstanding accomplishments" for the REIT, highlighting that for the entire year, both same-store revenue per available room (RevPAR) and adjusted EBITDA were up by almost 9% from the prior year, exceeding the midpoint of the REIT's full-year guidance.

The hotel REIT also kicked off 2024 on a strong note, with same-store RevPAR increasing 13.4% year over year in January and expected to rise over 8% in February. This has reinforced the REIT's positive outlook for its portfolio in 2024, which has allowed the company to raise its recurring quarterly dividend.

"As we stated last quarter, we expect to resume our targeted payout ratio in the range of 65% to 70% adjusted [funds from operations] per share for the full year, which based on our current guidance would translate into an incremental top-off dividend at the end of the year," Park Hotels CFO Sean Dell'Orto said during the REIT's earnings call Feb. 28.

Another hotel REIT, Xenia Hotels & Resorts Inc., upped its quarterly dividend by 20% to 12 cents per share on Feb. 27. "As to our payout ratio, this level of dividend reflects approximately 40% of [funds available for distribution] based on 2023 FFO. Over time, we expect the dividend to grow to prior levels or to roughly double and that our payout ratio will return to pre-pandemic levels in the mid-60% range," Xenia Hotels CFO Atish Shah said on a recent earnings call.

Four other REITS announced double-digit hikes in their dividends in February: single-family rental REIT American Homes 4 Rent, communications-focused SBA Communications Corp. and industrial-focused First Industrial Realty Trust Inc. and Prologis Inc.

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In Canada, multifamily REIT Boardwalk REIT announced a 23.1% increase in its regular monthly distribution to 12 Canadian cents per unit on Feb. 22.

Shopping center-focused RioCan REIT, meanwhile, boosted its monthly distribution by 2.8% to 9.25 Canadian cents per unit.

More than 45% of industrial US REITs increase dividends

In the US, REITs that announced dividend hikes during the two-month period ended Feb. 29 account for roughly 17.4% of the entire REIT industry.

Of the industrial REITs, five companies or roughly 45.5% of the sector raised their distributions in 2024. In addition to Prologis and First Industrial Realty, Plymouth Industrial REIT Inc. and Rexford Industrial Realty Inc. announced dividend hikes in February, while STAG Industrial Inc. declared an increase in January.

In the specialty segment, 33.3% of REITs in the sector have declared higher dividends. Among residential REITs, 30.0% have raised dividends this year.

Of the two Canadian REITs that declared dividend hikes so far, one came from the retail sector and another from the residential sector.