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Tennessee REITs: The Treasure Trove in The Volunteer State

Known for its rich history and spirited community, Tennessee boasts a thriving real estate investment scene. In this article, we will explore the lucrative world of Tennessee REITs, uncovering why they stand as a treasure trove for those looking to diversify and strengthen their investment portfolios.

Best Tennessee REITs - Featured Image

Key Takeaways – Best Tennessee REITs Chart

REIT Market Cap Dividend Yield (TTM) Industry
$15.38 Billion
$6.68 Billion
Hotel & Motel
$6.42 Billion
Healthcare Facilities
$2.30 Billion
Healthcare Facilities
$787.23 Million
$692.52 Million
Healthcare Facilities

Mid-America Apartment Communities, Inc. (MAA)

  • Market Capitalization: $15.38 Billion
  • Dividend Yield (TTM): 4.12%
  • Industry: REIT – Residential
  • Headquarters: Germantown, Tennessee

MAA has established itself as a REIT since its founding in 1977 by George E. Cates. The company’s focus is on the ownership, management, acquisition, development, and redevelopment of quality apartment communities, primarily in the Southeast, Southwest, and Mid-Atlantic regions of the United States.

As of September 30, 2023, MAA’s expansive portfolio includes an impressive 101,987 apartment homes, encompassing both existing communities and those under development. These properties are spread across 16 states and the District of Columbia, indicating a significant presence in the high-growth Sunbelt region of the U.S. MAA’s strategic approach has been to navigate various business cycles successfully while capturing growth and building an efficient, technology-driven operating platform.

Key to MAA’s success is its robust and investment-grade balance sheet, which has supported the company’s ability to pay consecutive quarterly cash dividends on common shares since 1994. This consistent financial performance has placed MAA in the top tier of REITs in terms of long-term shareholder returns.

Ryman Hospitality Properties, Inc. (RHP)

  • Market Capitalization: $6.68 Billion
  • Dividend Yield (TTM): 2.70%
  • Industry: REIT – Hotel & Motel
  • Headquarters: Nashville, Tennessee

Ryman Hospitality Properties, Inc. (RHP), founded in 1992, is a specialized lodging and hospitality REIT. RHP’s primary focus is upscale convention center resorts and country music entertainment. The company operates the Gaylord Hotels brand under Marriott International management, encompassing properties like Gaylord Opryland, Gaylord Palms, Gaylord Texan, Gaylord National, and Gaylord Rockies Resort & Convention Centers. These hotels are among the U.S.’s largest non-gaming convention center hotels based on indoor meeting space.

In addition to its hotel operations, RHP owns a significant stake in Opry Entertainment Group, which manages iconic country music brands, including the Grand Ole Opry, Ryman Auditorium, and WSM 650 AM. This segment is operated as part of a taxable REIT subsidiary.

Healthcare Realty Trust (HR)

  • Market Capitalization: $6.42 Billion
  • Dividend Yield (TTM): 7.30%
  • Industry: REIT – Healthcare Facilities
  • Headquarters: Nashville, Tennessee

Healthcare Realty Trust Incorporated (HR), founded in 1992, is a REIT that primarily focuses on owning and operating medical outpatient buildings. A standout characteristic of HR is its strategic emphasis on properties located around market-leading hospital campuses. This approach is central to HR’s operational strategy, allowing it to serve vital outpatient services such as surgery, cancer treatment, and imaging, while also accommodating important physician groups. These facilities are integral in supporting the missions of the associated hospitals.

HR has been the first and largest REIT to specialize in medical outpatient buildings, and its portfolio reflects this specialization. As of September 30, 2023, HR’s real estate portfolio comprises more than 697 properties, spanning over 41 million square feet across 35 states. This expansive portfolio demonstrates HR’s significant presence in the healthcare real estate market.

In addition to its focus on outpatient medical facilities, HR has also engaged in strategic financial activities to support its growth and operations. For instance, HR has been involved in strategic combinations, such as with Healthcare Trust of America, Inc. (HTA). This combination has involved securing commitments for amended and restated credit facilities, including a revolving credit facility and term loans supporting HR’s growth and future ventures.

National Health Investors, Inc. (NHI)

  • Market Capitalization: $2.30 Billion
  • Dividend Yield (TTM): 6.68%
  • Industry: REIT – Healthcare Facilities
  • Headquarters: Murfreesboro, Tennessee

National Health Investors, Inc. (NHI), established in 1991, is a REIT specializing in various financing methods, including sale-leaseback, joint-venture, mortgage, and mezzanine financing. This specialization allows NHI to diversify its investment strategies in the senior housing and medical sectors.

The portfolio of NHI is quite varied, encompassing independent living, assisted living, and memory care communities, entrance-fee retirement communities, skilled nursing facilities, and specialty hospitals. This variety showcases NHI’s ability to cater to different needs within the senior and healthcare sectors.

NHI employs a disciplined approach to value creation, which includes maintaining low leverage, staggering long-term debt maturities, and selectively partnering with high-quality operators. This strategy underlines NHI’s focus on sustainable growth and financial stability in the evolving healthcare and senior living markets.

CBL & Associates Properties, Inc. (CBL)

  • Market Capitalization: $787.23 Million
  • Dividend Yield (TTM): 5.59%
  • Industry: REIT – Retail
  • Headquarters: Chattanooga, Tennessee

CBL & Associates Properties, Inc. (CBL), established in 1978 by Charles B. Lebovitz, is a REIT that has significantly impacted the retail property landscape, especially in the Southeastern and Midwestern United States.

CBL’s portfolio includes a variety of property types, such as high-quality enclosed malls, outlet centers, lifestyle retail centers, and open-air centers, totaling 94 properties across 22 states. This diverse range of properties underlines CBL’s commitment to a broad retail presence. With 56 enclosed malls and over 30 open-air centers, the company covers a substantial footprint of 58.5 million square feet.

One of the key strategies of CBL has been its continuous effort to strengthen the company and its portfolio through active management, aggressive leasing, and profitable reinvestment in its properties. This approach has allowed CBL to remain relevant and competitive in a dynamic retail environment.

Community Healthcare Trust (CHCT)

  • Market Capitalization: $692.52 Million
  • Dividend Yield (TTM): 7.00%
  • Industry: REIT – Healthcare Facilities
  • Headquarters: Franklin, Tennessee

Community Healthcare Trust (CHCT) has a profile that focuses particularly on income-producing real estate properties related to outpatient healthcare services. As of September 30, 2023, CHCT’s investments were valued at approximately $1.05 billion, spread across 191 real estate properties in 34 states, encompassing about 4.2 million square feet in total.

CHCT’s approach to investment is notable for its concentration on outpatient healthcare services, a sector that has shown resilience and growth. This focus has enabled CHCT to acquire and finance healthcare-related real estate properties leased to various healthcare service providers, including hospitals, doctors, and healthcare systems.

The company has demonstrated a strong growth trajectory. Even through challenging times like the pandemic, CHCT has consistently increased funds from operations (FFO), a key metric for REITs. This growth indicates the company’s operational efficiency and effective investment strategy. The company’s share price and dividend payout performance have also been noteworthy, with a history of consecutive quarterly dividend increases.

However, it’s also important to consider the company’s recent challenges. The passing of CEO Tim Wallace in early 2023 marked a significant moment for CHCT, given Wallace’s pivotal role since the company’s inception. The future will reveal how CHCT adapts to this change in leadership and whether it continues to leverage its expertise in the healthcare real estate sector effectively.

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