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SBRA

Rate Ruckus Has Routed REITs. These 4 Now Pay Up to 14.6%

March 27, 2026 — 09:30 am EDT

Written by

BNK Invest for

BNK Invest->

Oil is up, and everything else is down. Stocks. Bonds. Even gold, the traditional safe haven!

Real estate stocks are on sale as well. Which means we contrarians need to go shopping. Today we'll look at four real estate investment trusts (REITs) yielding between 6% and 15%.

Right before the conflict started, I mentioned that we were looking at an attractive setup for price appreciation in REITworld.

> As the Fed cuts rates, the dividends that REITs pay become increasingly attractive to income investors. Money markets don't pay 5% any longer. Neither do many bond funds. But REITs pay ...

And rates are likely to continue lower due to the rollout of AI across the economy. Automation is capping wage growth. Customer support, for example, is well on its way to being automated. Next up we'll see bookkeeping, compliance and even legal work increasingly handled by machines. Softer inflation gives the Fed room to cut more than Wall Street expects.

The longer-term outlook has not changed. (A big hint for anyone with a mature, big picture mindset!) But in the short term, the Federal Reserve has pushed "pause" on its rate-cutting trend.

Earlier this year, we could chalk it up to economic data. Now? The central bank is clearly in wait-and-see mode because of the Middle East.

"The thing I really want to emphasize is that nobody knows," Fed Chair Jerome Powell recently said. "The economic effect [of the Iran war and oil disruptions] could be bigger, they could be smaller, they could be much smaller or much bigger. We just don't know."

As a result, the market has all but given up on any additional near-term relief in interest rates. FedWatch, which uses 30-day Federal funds futures prices to determine the probability of changes to the Fed's target rate, shows an 88% likelihood that the Fed will stay put at its late-April meeting.

And, In Fact, There's a 12% Probability That Rates Go Up

Source: CME FedWatch

That's misery for REITs, which thrive when borrowing costs fall and their dividends look good in comparison to shrinking bond yields--but struggle when rising rates produce the opposite effect.

Virtually All of Real Estate's 2026 Gains Have Been Erased

Again: The longer-term drivers of lower interest rates are still intact for now, which means this could be an ideal time to look for REIT deals. On my radar for a closer examination are these four landlords, which currently dole out between 6.1% and 14.6%.

Sabra Health Care REIT (SBRA)

Dividend Yield: 6.1%

Sabra Health Care REIT is a senior-focused healthcare play with roughly 360 property investments across the U.S. and Canada.

A little less than half of the portfolio, as measured by annualized cash net operating income (NOI), comes from skilled nursing and transitional care real estate. Another quarter or so is managed senior housing, with the remainder split among behavioral health properties, leased senior housing and specialty hospitals, among others.

The COVID crisis delivered a major shock to this type of real estate, but the long-term trends have remained in its favor--and that continues today. Supply is low. Pricing power is high. And Sabra is looking at expanding its senior housing operating portfolio (SHOP) via acquisitions.

As a result, shares have simultaneously been less volatile than the market but also plenty productive. In fact, the stock has steadily been making its way toward pre-COVID highs.

Returns Look Even Better When We Include the Dividend, But ...

Sabra's distribution hasn't budged since slashing it by a third during the depths of the COVID doldrums.

It's not for lack of room. SBRA pays 30 cents per share quarterly, so $1.20 across the year. Estimates for this year's adjusted funds from operations (AFFO) are $1.60 per share. That's a 75% AFFO payout ratio, which leaves room for at least some growth. But even though many other REITs have returned to dividend growth post-COVID, it's not exactly surprising that Sabra has been hesitant.

The latest dip gives us a decent yield of around 6%, and SBRA trades at a decent 12 times AFFO estimates. It's OK, but it's hardly bargain territory yet.

Millrose Properties (MRP)

Dividend Yield: 10.4%

I highlighted several new dividend payers last July, including Millrose Properties (MRP), one of the more unusual REITs to ever hit the market.

Millrose was spun off by homebuilder Lennar (LEN) in 2025. The company exists to buy and develop residential land, then sell finished homesites back to Lennar and other homebuilders throug