3 Net Lease REITs That Are Better Than Realty Income (NYSE: O)

Realty Income (NYSE: O) is undoubtedly the most popular REIT in the world, and for good reason. The company has managed to pay a growing monthly dividend for nearly 30 years in a row, even through major economic crises like the dotcom crash, the Great Financial Crisis, and the COVID-19 pandemic. Its total returns have also been among the best in the financial markets, outperforming even the likes of Berkshire Hathaway (NYSE: BRK.B) and Walmart (NYSE: WMT) since going public.

However, past performance is not always indicative of future results, and there are currently better opportunities available in the REIT market. In this article, we’ll highlight three net lease REITs that offer a path to higher total returns going forward.


NNN REIT is the oldest publicly listed net lease REIT and has an even longer track record of dividend growth than Realty Income. Like Realty Income, NNN REIT has a multi-decade track record of dividend growth, strong total returns, a great management team, high-quality net lease properties, and a strong balance sheet.

The main reason why NNN is likely to generate higher total returns over the long run is its smaller size, which makes it easier to grow. With a market cap of just $7 billion compared to Realty Income’s $45 billion, NNN REIT has more room for growth through acquisitions. The company’s CEO has stated that they have no problem finding $600 million of acquisition opportunities in any given year, which is their target.

2. Agree Realty (NYSE: ADC)

Agree Realty shares many similarities with Realty Income but is still far smaller, allowing it to grow at a faster pace. With a market cap of $5.5 billion compared to Realty Income’s $45 billion, Agree Realty has earned vastly higher total returns than Realty Income over the past 10 years.

Beyond its size advantage, Agree Realty also owns a better portfolio, has a stronger balance sheet, and enjoys many other advantages. The company has a higher percentage of investment-grade rated tenants, a larger portion of ground leases in its portfolio, a lower cost of equity, and higher spreads on new investments. Additionally, Agree Realty has seen significant insider purchases in 2023, while Realty Income has seen insider dispositions.

3. Essential Properties Realty Trust (NYSE: EPRT)

For investors willing to take on a bit more risk, Essential Properties Realty Trust could be an even better option than NNN REIT and Agree Realty. EPRT is a net lease REIT that focuses on service-oriented properties occupied by smaller middle-market tenants. This focus allows EPRT to enjoy higher cap rates, higher annual rent escalations, longer lease terms, lower landlord responsibilities, and better security from its tenants.

Historically, this has led to materially faster growth and higher total returns for EPRT compared to its peers. While EPRT’s tenants may be less creditworthy, the company mitigates these risks by requesting unit-level financials, investing only in highly profitable locations, structuring master leases, requesting additional security from other tenants, and diversifying individual risks as part of a large portfolio.

Despite its superior growth prospects and risk-adjusted returns, EPRT’s valuation multiple is not much higher than that of Realty Income, making it an attractive choice for investors seeking to maximize total returns.


While Realty Income can be a good choice for conservative investors seeking to maximize safe income, there are better opportunities available in the REIT sector for those looking to maximize total returns.

NNN REIT, Agree Realty, and Essential Properties Realty Trust all offer compelling advantages over Realty Income, including faster growth, better portfolios, and stronger balance sheets. For investors in the accumulation phase of their lives, these REITs may be a better choice than Realty Income.

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