US REIT Dividend Outlook 2026: Modest growth amid sector divergence

US real estate investment trusts are heading into 2026 with slower dividend momentum. Total dividends are expected to rise just 2.8%, a sharp slowdown from the robust 8.7% compound annual growth rate seen over the past five years. The weaker pace reflects a steep drop in special dividends, which are projected to fall to just about $500 million from $1.72 billion in 2025. Regular dividends, however, are set to climb 4.9% to $61.5 billion, highlighting continued income resilience despite a softer overall outlook.

Specialized REITs are expected to take the lead, contributing about $20 billion in dividends, followed by retail REITs. In contrast, hotel and resorts REITs remain the lowest contributors as the sector continues to recover from pandemic-era disruptions. While dividends have rebounded, the recovery has yet to return to pre-pandemic levels.

Tariffs and broader macro uncertainties have had a limited direct financial impact but have slowed investment decisions and new development activity. Many REITs expect clearer conditions and gradual normalization by late 2026. Meanwhile, median net operating income (NOI) growth has started to turn slightly positive, signaling cautious optimism.

Read the Is the REIT dividend cycle turning in 2026? report here

➤ US REIT dividends are expected to grow 2.8% in 2026, significantly below the 8.7% five-year compound annual growth rate (CAGR), mainly due to a sharp drop in special dividends.

➤ Specialized REITs will lead sector contributions with $20 billion in expected dividends, followed by retail REITs.

➤ Office and hotels and restaurants REITs continue to lag, with occupancy rates and payout ratios remaining far below the 90% threshold.

➤ S&P Global Market Intelligence assesses the risk landscape for 2026 from a stock risk and sector specific point of view.

Still, headwinds persist. Office and hotel REITs remain under pressure as remote work keeps office occupancy low and inflation dampens leisure spending. Payout ratios in these segments hover around 40%–42%, well below the typical 90% distribution threshold.

Looking ahead, sector resilience is likely to continue, supported by stable leasing demand, steady capital markets activity, and essential-service REIT performance. The report's scenario analysis of the top 10 dividend payers for 2026 highlights a clear divide: while specialized and retail REITs appear well positioned for steady income growth, office and hospitality REITs face an uphill climb amid ongoing structural challenges.

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