The Motley Fool·2025-12-01 13:45Core Viewpoint - The focus is on three real estate investment trusts (REITs) that are expected to enhance passive income through dividend growth by 2026, despite past challenges faced by these companies [1][15]. Group 1: Medical Properties Trust (MPW) - Medical Properties Trust has faced significant challenges, including tenant bankruptcies that impacted rental income and debt refinancing due to rising interest rates [3]. - The company has taken corrective actions by replacing troubled tenants, selling properties, and cutting dividends to strengthen its balance sheet, resulting in a more robust portfolio [4]. - The REIT anticipates a steady rise in rental income as new tenants begin operations, leading to a recent 12% dividend increase, raising the yield to 6.3% [6]. Group 2: Mid-America Apartment Communities (MAA) - Mid-America Apartment Communities has a strong track record, having never suspended or reduced its dividend in over 30 years, with a 7% annual growth rate over the past decade [7]. - The company is expected to announce another dividend increase soon, supported by a decrease in new apartment deliveries, which should enhance rental growth in 2026 [8]. - Mid-America is investing approximately $800 million in new developments, which is projected to fuel earnings growth and support continued dividend increases [10]. Group 3: W.P. Carey (WPC) - W.P. Carey has restructured its portfolio by exiting the office sector and investing in higher-quality industrial and retail properties, which has improved its financial position [11]. - The REIT plans to invest between $1.8 billion and $2.1 billion in new properties this year, contributing to a 5.9% growth in adjusted funds from operations per share [13]. - W.P. Carey's dividend has been consistently raised since late 2023, currently yielding 5.4%, with expectations for continued growth in 2026 due to strong rent growth and financial flexibility [14].