REITs That Deliver Consistent Dividend Growth: A Long-Term Investment Guide

Why Dividend-Paying REITs Outperform

Historically, dividend-paying stocks within the S&P 500 have demonstrated superior performance—outpacing non-dividend payers by over double over five decades, according to research from Ned Davis Research and Hartford Funds. Among dividend stocks, those that consistently raise payouts have been the real wealth creators. The real estate investment trust (REIT) sector stands out as particularly attractive for income-focused investors seeking reliable, growing cash flows.

Many REITs generate substantial yields while maintaining disciplined dividend expansion policies. For investors seeking buy-and-hold opportunities with the potential for decades of rising income, REITs offer a compelling combination of current yield and future growth. Three exceptional examples demonstrate this thesis particularly well.

Extra Space Storage: Scaling Through Acquisition and Management

Extra Space Storage (NYSE: EXR) commands the largest market position in U.S. self-storage, overseeing approximately 4,200 facilities representing more than 322 million rentable square feet—roughly 15.3% of the nation’s total capacity.

The company operates through a diversified portfolio structure: it directly owns 48% of properties, maintains partnership stakes in an additional 11% via joint ventures, and manages the remaining 41% for third parties. This tiered approach creates multiple revenue streams. Owned properties generate escalating rental income, while the management segment delivers consistent fee-based cash flows independent of ownership.

Portfolio expansion has been central to ES’s strategy. The company pursues growth through acquisitions (notably the 2023 purchase of Life Storage for $15 billion), joint venture investments, and development of its third-party management business. A bridge lending platform further strengthens its ecosystem by funding self-storage development projects.

These growth initiatives have translated into meaningful dividend increases. Over a decade-long period, Extra Space Storage has elevated its dividend by exceeding 110%. The stock currently yields more than 6%. Positioned with a sturdy balance sheet and multiple acquisition channels—buying from joint venture partners, properties it manages when owners divest, and completed developments—the company retains substantial capacity to grow distributions further. Historical performance validates this: over 20 years, Extra Space Storage delivered total returns surpassing 2,400%, ranking third within the REIT sector.

Realty Income: An Industrial-Scale Dividend Growth Machine

Realty Income (NYSE: O) operates as the world’s sixth-largest REIT, controlling over 15,000 retail, industrial, gaming, and mixed-use properties spanning the U.S. and European markets.

The strategic foundation lies in net-lease properties. Under these long-term structures, tenants assume responsibility for all operating costs—maintenance, property taxes, insurance—creating exceptionally stable, predictable income for the REIT. This certainty enables aggressive dividend growth policies.

The dividend track record is remarkable: 112 consecutive quarterly increases, with a 4.2% compound annual growth rate maintained for 30 years. Currently yielding 5.7%, this income stream has powered a 13.7% annualized total return for long-term holders. Realty Income’s continued property acquisitions suggest dividend growth will persist. The company operates one of the sector’s most conservatively managed balance sheets, facing an estimated $14 trillion addressable market in global net-lease real estate—providing decades of potential investment opportunities.

Rexford Industrial Realty: Regional Specialization and Rent Growth

Rexford Industrial Realty (NYSE: REXR) takes a focused approach, concentrating exclusively on Southern California’s industrial real estate market. The portfolio comprises 420 properties encompassing 51 million square feet.

Southern California’s industrial sector benefits from structural advantages: robust tenant demand and constrained supply. These dynamics support high occupancy rates and steady rental escalation. Recent lease-signing activity illustrates this strength—new contracts execute at rates averaging 23.9% above prior levels, with embedded annual growth averaging 3.6%.

Rexford pursues growth actively through redevelopment initiatives and strategic acquisitions. This expansion framework has enabled the company to expand its dividend at a 15% compound annual rate over five years. With industrial demand remaining resilient and financial capacity for portfolio growth intact, the company—currently yielding 4.2%—appears positioned to sustain dividend increases ahead.

The Case for REITs as Lifetime Holdings

These three REITs exemplify why dividend-growth companies merit “forever portfolio” status. Each demonstrates a multi-decade commitment to raising shareholder distributions. Extra Space Storage, Realty Income, and Rexford Industrial Realty have built business models where organic growth and strategic expansion directly translate into larger dividend checks annually.

For investors prioritizing passive income supplemented by capital appreciation, owning a diversified collection of high-quality REITs offers a time-tested path to building wealth. The historical data—spanning decades—confirms that patience with dividend growers generates results that compound dramatically over lifetimes.