These aren't the best of days for investing in retail space.
The National Association of Realtors says about 10% of retail
square footage is vacant and has forecast a vacancy rate of 15%
for offices and 9% for industrial buildings through the end of
ButNational Retail Properties (
), a real estate investment trust, has managed to consistently
grow its revenue and dividend over the years.
The Orlando, Fla.-based REIT's strategy is to buy properties
with long-term leases with established national and regional
It owns 1,838 stores in 47 states with 20.2 million square
feet of leasable area. It says that 98% of its stores are leased
to more than 350 tenants with 36 retail categories. Convenience
stores make up nearly 20% of its portfolio, followed by
full-service restaurants and automotive services businesses.
Its assets total $4.6 billion.
It has acquired $1.8 billion in new properties in the past two
years. In Q2, it acquired 209 properties, investing $438 million
at an initial cash yield of 7.7%. The largest transaction was the
purchase of 139 SunTrust Bank branches in the Southeast.
The company pays an annualized dividend of $1.62 for a 4.6%
yield. It boasts that it has increased its dividends in each of
the last 24 years.
Low interest rates have been an opportunity to get cheap cash
through both debt and equity. Moody's raised the rating on its
debt earlier this month.
National's Relative Price Strength Rating is only 31, which
means 69% of stocks outperformed it over the past year. But over
the past 24 weeks, it does seem to be carving out a base. It has
an Accumulation/Distribution of B-, which means it's under mild
It's recently risen from a low of 30.06 to just below 35. It's
popped above its 200-day moving average line for the first time
in 13 weeks.