Inflation is on the rise these days. It rose at its fastest pace in four decades, jumping 8.5% in March. This drives up the cost of materials, labor and other goods, which eats into the company’s profit margins.

Although a high rate of inflation is difficult for most companies, some are relatively resistant to inflation because they can increase their rates to more than compensate for this increase. This is the case for several real estate investment trusts (REITs). Here are three inflation-resistant REITs that are helping to boost my portfolio these days.

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Several factors cushion the blow

Invitation houses (NYSE: INVH) is a Residential REIT who owns single-family rental homes. It offers investors several protections against inflation. First, it is able to increase its rental rates at a rate faster than inflation. For example, rents on leases signed in January and February were about 11% higher than rates on expiring leases, so the company is seeing net operating income grow 9% to 10.5% this year. , even after taking into account 5.5% to 6.5% growth in operating expenses.

This growing revenue stream allows Invitation Homes to provide its investors with inflation-beating revenue growth. The REIT increased its dividend by nearly 30% earlier this year.

Another way the REIT benefits from inflation is through rising house prices. With inflation pushing up home values, Invitation Home’s portfolio of over 80,000 homes benefits from this appreciation. Add rising real estate values ​​to its inflation-beating earnings and dividend growth rates, and this REIT turns out to be an excellent inflation hedge.

Benefiting from rising commodity prices

Weyerhaeuser (NYSE:WY) is a Timberland REIT which provides direct exposure to rising wood and lumber prices, which have played a role in housing-related inflation. Rising lumber prices generated record profits for Weyerhaeuser last year, as its cash flow from operations and funds available for distribution more than doubled.

Weyerhaeuser investors benefit directly from rising lumber prices through the company’s dividend framework. It pays a base quarterly dividend, which it recently increased by 5.9% to $0.18 per share each quarter (above its 5% annual growth target). Additionally, the company pays a variable supplemental dividend, which rises and falls with commodity prices. Thanks to its inflation-linked revenue increase, Weyerhaeuser paid an additional extra dividend of $1.45 per share earlier this year.

Weyerhaeuser will likely continue to offer above-average core dividend growth and large supplement payments if inflation continues to drive up commodity prices.

Built-in inflation increase

WP Carey (NYSE: WPC) is a Diversified REITs focused on owning operationally critical real estate leased under long-term triple net leases. This lease structure makes the tenant responsible for building maintenance, property taxes and insurance costs, which helps protect against the impact of cost inflation.

In addition to this inflation protection, WP Carey has built in rental rate escalations for most leases. Overall, 59% of its leases have inflation-indexed rental rates, while most of the rest have either fixed rental rate increases or market rate exposure.

The company’s portfolio construction “uniquely positions” WP Carey to “benefit from inflation,” according to CEO Jason Fox’s comments. He said “we expect our CPI-linked leases to provide a tailwind to our growth.” It should provide the company with additional rental income to support continued dividend growth.

Help ease the sting of inflation

Inflation is starting to have a big impact on purchasing power by making many things more expensive. However, many REITs are relatively immune to the effect of inflation due to their ability to capture higher rates while controlling expenses. That means these inflation-resistant REITs help take some of the inflation out of my portfolio.

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Matthew DiLallo owns Invitation Homes, WP Carey and Weyerhaeuser. The Motley Fool owns and recommends Invitation Homes. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.