8 US REITs, 1 Canadian REIT announce dividend boosts in May

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.

Eight publicly traded real estate investment trusts based in the US declared increases to their regular dividend payouts in May, propelling the total of US REITs that have announced dividend hikes in the first five months of 2024 to 44.

A Canadian REIT also disclosed an incoming dividend hike during the same month, bringing the year-to-date total for Canadian REITs that have announced higher dividends to three, according to data compiled by S&P Global Market Intelligence.

Summit Hotel leads dividend growth in May with 33% boost

Hotel-focused Summit Hotel Properties Inc. disclosed the largest relative dividend growth in May, increasing its quarterly cash dividend by 33.3% to 8 cents per share on May 1.

"The increased dividend continues to represent a prudent AFFO payout ratio, leaving ample room for potential increases over time, assuming no material changes to the current operating environment," said Summit Hotel's Executive Vice President and CFO William Conkling, on the company's May 2 earnings call.

"The company continues to prioritize striking an appropriate balance between returning capital to shareholders, reducing corporate leverage and maintaining liquidity for future growth opportunities," Conkling said.

Another hotel landlord that declared a double-digit dividend growth in May was Sunstone Hotel Investors Inc., which announced a cash payout hike of about 28.6% to 9 cents per share on May 6. Sunstone Hotel CEO Bryan Giglia noted that despite it being the most challenging quarterly comparison of the year relative to 2023, the company is actually pleased with its portfolio's performance during the first quarter as it benefited from highly compressed demand in the early part of the year.

"Our board of directors has elected to increase our quarterly cash dividend, reflecting the incremental earnings from our recent acquisition and our intention to better calibrate the base quarterly distributions with our expected full-year taxable income," Giglia said. "Together with the increase in our dividend from last year, our base quarterly dividend is now 80% higher than it was a year ago and is consistent with our strategy of returning incremental capital to stockholders."

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Apart from the two hotel REITs, multifamily-focused Veris Residential Inc. also had a double-digit growth in its quarterly cash distribution during the month, after upping its dividend by 14.3% to 6 cents per share on May 6. The recent dividend hike reflects the REIT's increased liquidity and financial flexibility due to its new $500 million revolving credit facility and term loan package following the completion of the REIT's transformation to a pure-play multifamily REIT.

Five other REITs declared dividend hikes in May. They are healthcare-focused Strawberry Fields REIT Inc., regional mall REIT Simon Property Group Inc., single tenant-focused Realty Income Corp., diversified REIT Broadstone Net Lease Inc. and shopping center REIT InvenTrust Properties Corp.

In Canada, retail REIT CT REIT announced a 3.0% increase in its regular monthly distribution to 7.71 Canadian cents per unit on May 6.

More than half of residential US REITs raised dividends YTD

The dividend hike announcements in May have brought the year-to-date total to 44 US REITs, representing 28.4% of the entire US REIT industry.

About 55.0% of the residential REITs announced higher dividend payments since the beginning of the year, the highest proportion of any property sector.

Industrial-focused REITs came in second at about 41.7% of the sector, representing five dividend hikes year to date. The specialty segment followed, with 33.3% of REITs in the sector boosting their dividends so far this year.

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