Why Triple Net Lease REITs Are Worth Your Attention in 2026

The investment landscape for triple net lease REITs has shifted dramatically. After facing headwinds in 2022-2023 when rising interest rates made property acquisitions costlier and dividend yields less competitive against higher-paying CDs and T-bills, these income-generating vehicles are staging a comeback. With the Federal Reserve executing six consecutive rate cuts through 2024-2025, triple net lease REITs have become increasingly attractive again—and it may be wise to establish positions before income-focused investors flood back in and drive valuations higher.

Understanding the Triple Net Lease Advantage

Real estate investment trusts purchase properties and distribute rental income to shareholders while maintaining tax-advantaged status by paying out at least 90% of taxable income as dividends. The triple net lease model deserves particular attention because it shifts maintenance costs, insurance, and property tax burdens directly to tenants—not to the REIT itself. This structural advantage creates more predictable cash flows and allows REITs to generate the stable, measurable profits that make them reliable income vehicles, even during uncertain economic periods.

The beauty of this model becomes evident when you examine how these REITs weather macroeconomic challenges. By securing long-term tenant commitments and leveraging CPI-indexed lease agreements, triple net lease REITs can lock in revenue growth that keeps pace with inflation without requiring continuous reinvestment in property maintenance.

Realty Income: Recession-Resistant Retail Properties

With over 15,500 commercial properties spanning the U.S. and Europe, Realty Income operates as one of the world’s largest REITs by focusing on recession-resistant retailers. Its tenant roster includes industry stalwarts 7-Eleven, Dollar General, and Walgreens—businesses that maintain steady customer traffic regardless of economic cycles. Even when some weaker tenants faced store closures in recent years, stronger tenants expanded aggressively to fill the gap, maintaining an occupancy rate that hasn’t dipped below 98.7% in its latest quarter.

As a triple net lease REIT, Realty Income’s tenant base absorbs property-related expenses, enabling predictable cash generation. The company projects adjusted funds from operations (AFFO) to reach $4.25-$4.27 per share in 2025, comfortably supporting its forward dividend payment of $3.22 per share. Trading at roughly 14 times trailing AFFO, Realty Income offers both yield and capital preservation—its 5.3% forward yield has been bolstered by 132 consecutive payout increases since going public in 1994.

Vici Properties: Entertainment-Backed Stability Through CPI Indexing

Vici operates an experiential REIT model, holding 93 casinos and resorts across the U.S. and Canada with major tenants including Caesar’s Entertainment, MGM Resorts, and Penn Entertainment. While entertainment venues might seem vulnerable to economic downturns, Vici has maintained a perfect 100% occupancy rate since its 2018 debut through a deliberate strategy: locking tenants into multi-decade leases tied directly to the Consumer Price Index (CPI).

This CPI-indexed approach represents a key advantage of Vici’s triple net lease structure. As inflation rises, rent escalations automatically follow, protecting Vici’s dividend-paying capacity. The company has raised its quarterly dividend annually since going public, currently yielding 6.1% forward. Management expects 2025 AFFO to grow 4%-5% to $2.36-$2.37 per share, easily covering the forward dividend of $1.80. At current valuations around 16 times trailing AFFO, Vici remains attractively priced for income-seeking investors.

Digital Realty: Capturing AI and Cloud Growth Trends

Digital Realty operates over 300 data centers serving 5,000+ customers across 50+ metropolitan areas, providing crucial infrastructure for more than half of the Fortune 500, including IBM, Oracle, and Meta. While this triple net lease REIT faced headwinds over the past four years—divesting older “non-core” facilities, managing higher interest expenses, and weathering strong dollar impacts—the trajectory is now improving.

The company’s growth engine rests on secular expansion of cloud infrastructure and artificial intelligence markets. Management expects constant-currency core funds from operations (FFO) to rise 8%-9% to $7.25-$7.30 per share in 2025, comfortably covering the $4.88 dividend and supporting a 3% forward yield. Occupancy rates are projected to expand 100-200 basis points throughout 2025 as Digital Realty rightsizes operations and benefits from the AI and high-performance computing boom. Investors seeking AI exposure with income generation and lower volatility than pure tech stocks will find Digital Realty’s balanced profile particularly appealing.

The Case for Triple Net Lease REITs in a Declining Rate Environment

The shift in the Fed’s monetary policy creates a meaningful opportunity window for triple net lease REITs. Lower interest rates reduce property acquisition costs while making dividend-yielding assets more competitive relative to fixed-income alternatives. The three REITs outlined above—each operating under the triple net lease structure—are positioned to benefit from this environment while their valuations remain below historical averages.

Realty Income offers defensive stability through recession-resistant retail. Vici locks in inflation protection through CPI-indexed leases. Digital Realty captures structural growth from AI and cloud expansion. Before interest-rate-sensitive income investors pivot aggressively back to the sector, establishing positions in these carefully-selected triple net lease REITs may prove a prudent strategy for building a resilient, income-generating portfolio.