How Much Stress Can REITs Withstand?

The answer: It's getting a little close for comfort... For the first three quarters of this year, REITs paid an average dividend of 7%, according to the National Association of Real Estate Investment Trusts, the Washington-based trade group, compared with an average dividend of 1.95% for companies in the Standard & Poor's 500 stock index. That helps draw investors to REITs. But when dividends are threatened, many of those investors tend to flee. The issue has huge implications for real-estate stocks.