One of my favorite of Charles Schultz’s animations is the 1965 special A Charlie Brown Christmas. Early on, Lucy van Pelt tries to cheer up Charlie Brown by saying she never gets what she really wants under the Christmas Tree — real estate.

For the past few months, though, it’s seemed that many in the markets don’t share a lick of Lucy’s desire for properties. Real estate investment trusts (REITs) have been drifting lower, with the Dow Jones US Select REIT index down year to date by 8.4% (through March 19).

With the new Federal Reserve chairman, Jerome Powell, expected to raise the target rate for fed funds at least three times this year, interest-rate fears have weighed on REIT holdings. But here’s the funny thing: For the past few weeks, the REIT sector has been coming back. The Dow Jones REIT index has gained nearly 5% from its Feb. 8 closing low.

What’s Going on With REITs?

The common knock against REITs is that when interest rates rise, REIT prices tend to move in an inverse fashion. So, if bond yields are up, the dividend yields look less attractive and REIT prices fall. Also, since REITs generally carry debt on their balance sheets, rising rates can cost the companies more to borrow, cutting profit margins and cash for dividend payouts.

While I do expect a gradual rise in Fed-administered rates this year, so far that prospect seems to have been overbaked into the REIT market.

What’s more, REITs stand to benefit from tax reform. The Tax Cut and Jobs Act (TCJA), the new tax bill President Donald Trump signed into law in December, now allows investors to deduct 20% of the ordinary income they receive in REIT dividends. That effectively means that if you’re in the top bracket with a tax rate of 37%, the tax bite on your REIT payouts drops to only 29.6% (at worst). In other words, the new law makes each of our REIT dividend yields all the more valuable — more than offsetting the impact of rising rates.

And it gets better. The TCJA also cut the capital gains tax on assets sold by REITs to 20% for more tax savings on those dividend payouts. In addition, the new law eases limits on interest-expense deductions, further reducing effective taxes paid by REIT investors.

All in, between the calming rate fears and the sweetened tax benefits, REITs qualify as one of the better income-producing investments out there. One REIT, in particular, stands out.

The REIT That Stands Out

I’ve followed and recommended W.P. Carey (NYSE:WPC) stock ever since it came to the public market, and I got to meet and know the founder, William Polk Carey. (Bill, who passed away in 2012, was related to the 11th U.S. president, James K. Polk.)

Here’s how WPC’s business model works. Typically, companies sell headquarters, distribution and other buildings to Carey and then lease them back for the long term. The leases are structured on a “triple net” basis, with the tenant paying all current expenses for taxes, maintenance and insurance.

This format insulates Carey stock from rising costs, while putting cash from the sale-leaseback in the tenant’s pocket. WPC’s tenant list includes many Fortune 500 companies around the United States as well as major international companies and foreign governments in Europe and Asia.

Meanwhile, Carey’s ever-rising dividend works out to a 6.5% yield. So, you’re paid well while you wait for further gains as the overall total return for Carey has been generating an average annual return of over 14%, nearly double the US REIT market as tracked by the Bloomberg US REITs Index.