Realty Income Offers Better Coverage; Healthpeak Offers More Yield

Healthpeak's roughly 6.7% yield is higher than Realty Income's, but the extra income comes with a more concentrated set of property risks.

Healthpeak owns outpatient medical buildings, senior housing and life-science properties. Senior housing benefits from aging demographics and constrained new supply, while outpatient assets can produce durable demand near health systems. The weak link is lab space, where vacancy and slower biotechnology funding can pressure rent growth and valuations.

Realty Income is broader. It owned interests in 15,588 properties across 92 industries at June 30, with 98.8% occupancy and an average remaining lease term of about 8.6 years. Second-quarter AFFO was $1.09 a share, and dividends paid represented 74.5% of AFFO. Management raised full-year AFFO guidance to $4.44 to $4.45.

Healthpeak's healthcare exposure can deliver faster internal growth, but its results depend on specific property categories and development execution. Realty Income's scale and diversification reduce single-sector risk, although they do not eliminate refinancing costs or tenant failures.

The extra Healthpeak yield compensates investors for a more concentrated property mix and unresolved lab-market weakness. Investors seeking steadier current coverage have the stronger case for Realty Income. Those willing to accept more volatility for demographic growth may prefer Healthpeak, but should watch lab occupancy, senior-housing margins and capital spending rather than the yield alone.