Rising interest rates and signals from the Federal Reserve that the rates will remain high for a long time have taken the shine off real estate investment trusts (REITs). These companies tend to increase their property portfolios, and that means having to borrow money. The higher interest costs put pressure on REITs’ profits.
Many well-run, financially robust REITs have seen their share prices take big hits. This includes Realty Income Corp (NYSE:O), the gold standard of REIT and dividend investing.
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