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America's REIT Dream Team balances five SWAN Anchors with five higher-yield, higher-risk Buoys to optimize total return and diversification. Buoy picks - REXR, COLD, VICI, NLCP, and LADR - offer compelling catalysts: industrial scarcity, food infrastructure, gaming recovery, cannabis normalization, and disciplined capital allocation. REXR, COLD, VICI, NLCP, and LADR each present 20–30%+ total return potential but require careful position sizing due to elevated risk and sector-specific headwinds.
High-yield REITs with strong dividend security remain attractive despite rising Treasury yields and recent share price gains. Only seven REITs currently offer yields above 5.75% with reasonable to strong dividend safety, as rising share prices and treasury yields compress spreads. Dividend strength, as measured by Seeking Alpha Quant Ratings, is primarily supported by low debt, conservative payout ratios, and sector-relative revenue growth.
Tenant default/restructuring pains have been mostly mitigated by NewLake Capital's four-wall strategy and focus on "credit-worthy cannabis tenants." These have contributed to the 100% rental collection, healthy balance sheet, and well-covered dividend payouts, underscoring their highly compelling cannabis REIT thesis. The discounted price/AFFO of 8.19x has contributed to NLCP's rich dividend yield of 10.83% and outsized upside potential to my bull-case price target of $31.10.
NewLake Capital Partners remains a Strong Buy, offering an attractive valuation and a nearly spotless balance sheet amid industry headwinds. Key catalysts include potential cannabis rescheduling, uplisting to major exchanges, tenant improvements, and leveraging balance sheet strength for growth at double-digit cap rates. Despite weak Q2 results from vacant properties, NLCP's 10.8% yield, 88% AFFO payout ratio, and weighted-average lease term of 11.6 years provide stability.
NewLake Capital Partners (NLCP) offers a nearly 11% yield, underpinned by a strong balance sheet and long-term leases with leading cannabis operators. Q2 results showed weaker year-over-year FFO and AFFO due to three vacant cultivation facilities, but the dividend remains well covered with an 88% AFFO payout ratio. Major catalysts include potential tenant access to capital markets via rescheduling, and the possibility of NLCP uplisting to a major exchange, both of which could significantly lower risk and increase investor interest.
Not all REITs are equally attractive. Capital recycling is key to maximizing returns. I present an example of a REIT to sell and one to buy.
NewLake Capital Partners, Inc. (NLCP) Q2 2026 Earnings Call Transcript
Second Quarter 2026 Revenue Totaled $12.1 Million Second Quarter 2026 Net Income Attributable to Common Stockholders Totaled $5.9 Million, Funds from Operations Totaled $9.9 Million, and Adjusted Funds from Operations Totaled $10.3 Million Conference Call and Webcast Scheduled for August 6, 2026 , at 11 a.m. Eastern Time NEW CANAAN, Conn.