Specialty REITs meet all of the REIT qualifications, but they do not own properties that fit one of the traditional REIT categories. They make up, effectively, all of the REITs that have not been mentioned on this list yet. Specialty REITs may own movie theaters, casinos, farmland, outdoor advertising sites and virtually any other real estate class imaginable.
Specialty REITs cover a wide range of property types, so it’s impossible to identify universal risks for specialty REITs. For instance, a REIT that owns farmland would have a completely different risk profile than one that owns movie theaters. The risks are relative to the properties within the specialty REIT’s portfolio.
The strength of speciality REITs lies in the investors’ ability to invest in asset classes they know and understand whilst benefiting from the tax and dividend advantages of the REIT structure.
There are 16 specialty REITs trading on major US stock exchanges. Specialty REITs include VICI Properties Inc (NYSE: VICI), Iron Mountain, Inc. (NYSE: IRM) and Gaming and Leisure Properties, Inc. (NASDAQ: GLPI).