The real estate investment trust (REIT) sector has been hit hard by rising interest rates. That makes sense, since higher rates will directly increase operating costs. Rising rates have also made lower-risk income options, like CDs, more competitive. But conservative long-term investors should probably see the current weakness as an opportunity. While their stocks remain moribund, it would be a good idea to check out Realty Income (NYSE: O), NNN REIT (NYSE: NNN), and Agree Realty (NYSE: ADC).

The one key factor that ties all three of these REITs together is that they all own single-tenant net lease properties. Net leases require tenants to pay most property-level operating costs. This helps to simplify the operation of the REIT and helps to protect the REIT from rising costs (for things like maintenance). It is one of the most conservative approaches in the REIT sector, assuming that the portfolio of properties is large enough to offset the risk of a tenant loss at any individual property. Realty Income, NNN, and Agree are among the largest net lease REITs you can buy, so tenant risk is minimal.

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Source Fool.com