Income investors may want to keep a close eye on real estate investment trust (REIT) stocks following the Federal Reserve’s latest rate hike.
On Wednesday, the Fed raised its benchmark interest rate by 25 basis points to a range of 3.75%-4.00%, as policymakers attempt to bring persistent inflation back toward their 2% target.
Higher rates can pressure REITs by increasing borrowing costs while making fixed-income investments more competitive with their dividend yields. However, rate-driven selling can also create potential buy-the-dip opportunities when underlying cash flows, balance sheets, and dividends remain intact.
With that in mind, here are five top-rated REITs trading below $10 a share and offering dividend yields above 3%.
Adamas Trust – ADAM
Zacks Rank #1 (Strong Buy)
Stock Price: $9
Adamas ADAM) is an internally managed mortgage REIT that invests primarily in residential mortgage assets, including agency mortgage-backed securities, residential loans, and credit-sensitive assets. It also originates business-purpose loans through its Constructive platform.
Fundamentals have been improving, with Q2 earnings available for distribution (EAD) rising 36% year over year to $0.30 per share. GAAP Book value increased for a fourth straight quarter to $10.16 per share, while adjusted book value reached $11.05—well above ADAM’s recent stock price.
Adamas also raised its quarterly dividend by 11% to $0.30 per share, equating to $1.20 annually and an indicated yield of roughly 12% at current levels.
Cherry Hill Mortgage Investment – CHMI
Zacks Rank #2 (Buy)
Stock Price: $2
Cherry Hill CHMI) is a residential mortgage REIT that invests in agency residential mortgage-backed securities and mortgage servicing rights.
The company generated Q2 earnings available for distribution (EAD) of $0.15 per share, comfortably above its $0.10 quarterly dividend, while common book value stood at $3.16 per share versus CHMI’s sub-$3 stock price. Cherry Hill also ended Q2 with $52.1 million of unrestricted cash.
CHMI recently maintained its $0.10 quarterly dividend, producing a yield of roughly 14% at its recent share price.
Investors should note that Cherry Hill has agreed to merge with TPG Mortgage Investment Trust MITT), making deal completion an additional factor beyond interest rates and underlying mortgage fundamentals.
China Overseas Land & Investment – CAOVY
Zacks Rank #2 (Buy)
Stock Price: $8
China Overseas Land & Investment CAOVY) is the outlier on this list because it is not technically a REIT. Rather, the Hong Kong-based company is a major property developer with commercial property operations across China and other markets.
Still, its recent financial trends make CAOVY worth watching. First-half 2026 revenue jumped 17% year over year to $9.2 billion, while contracted property sales rose nearly 12%. The company generated roughly $4.25 billion of net operating cash inflow and reduced total debt by more than $1.5 billion, helping lower its net gearing ratio—a measure of net debt relative to equity—to 27.2%.
Trading at $8, CAOVY has a dividend yield of roughly 3.36%, although investors should account for ADR fees and currency fluctuations.
Industrial Logistics Properties Trust – ILPT
Zacks Rank #2 (Buy)
Stock Price: $7
Industrial Logistics Properties Trust ILPT) owns more than 400 industrial and logistics properties across the United States, making it the most traditional equity REIT on the list.
ILPT had an especially strong Q2, with portfolio occupancy climbing to 99.1% as the company completed nearly 5.4 million square feet of leasing activity at weighted-average rental rates 35.4% above prior rates. Normalized funds from operations (FFO) surged 48% year over year to $0.31 per share.
More importantly, in a higher-rate environment, ILPT refinanced its remaining variable-rate debt, eliminating its exposure to rising interest rates and leaving it with no debt maturities until 2029. Improved cash flow also allowed management to double its quarterly dividend to $0.10 per share, giving ILPT a yield of roughly 5% at current levels.
KKR Real Estate Finance Trust – KREF
Zacks Rank #2 (Buy)
Stock Price: $6
KKR Real Estate Finance Trust KREF) is a mortgage REIT managed by an affiliate of global investment firm KKR KKR) that primarily originates senior loans secured by commercial real estate.
KREF is the more speculative buy-the-dip candidate after sizable credit losses pressured recent earnings. Still, its stock price of $6 a share sits at a substantial discount to its Q2 common book value of $10.24 per share.
Furthermore, the company ended Q2 with $721.6 million of liquidity and received more than $806 million in loan repayments. Multifamily and industrial properties account for 60% of its $4.5 billion loan portfolio, while 79% of secured financing is fully non-mark-to-market.
That said, KREF’s latest quarterly common dividend was reduced to $0.10 per share. However, if that rate is maintained, its $0.40 annualized payout will still produce a forward yield near 6%.
Bottom Line
Higher interest rates can create legitimate headwinds for REITs, but they can also produce attractive entry points when indiscriminate selling pushes financially improving companies below their underlying asset values.
For income investors willing to tolerate that volatility, a rate-driven pullback could make these sub-$10 REIT stocks increasingly compelling buy-the-dip candidates, especially with their buy ratings indicating a favorable trend of rising EPS revisions.
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Cherry Hill Mortgage Investment Corporation (CHMI): Free Stock Analysis Report
Industrial Logistics Properties Trust (ILPT): Free Stock Analysis Report
KKR Real Estate Finance Trust (KREF): Free Stock Analysis Report
Adamas Trust, Inc. (ADAM): Free Stock Analysis Report
China Overseas Land & Investment Ltd. - Unsponsored ADR (CAOVY): Free Stock Analysis Report
KKR & Co. Inc. (KKR): Free Stock Analysis Report
TPG Mortgage Investment Trust Inc. (MITT): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).