Whether or not you like President Trump, small businesses sure do, and they hire the bulk of the workers in the United States. In fact small business optimism is at the highest level since the Reagan years, and with regulations and taxes getting cut, you can bet that the economy can stay strong.

One area that benefits directly from a positive economy is real estate investment trusts (REITs), especially those with office properties. We screened the Merrill Lynch REIT research universe and found four top companies that all pay at least a 4% dividend and have solid growth potential. All are rated Buy at Merrill Lynch.

Armada Hoffler Properties

This is one of the higher yielding plays, and the stock has performed well this year. Armada Hoffler Properties Inc. (NYSE: AHH) is a vertically integrated, self-managed REIT developing, building, acquiring and managing high-quality, institutional-grade office, retail and multifamily properties.

The company has posted solid numbers this year, and Merrill Lynch has noted that both leasing spreads and occupancy growth were positive when the company reported first-quarter results in May.

Investors are paid a big 5.05% distribution. The Merrill Lynch price target for the shares is $16.75, and the Wall Street consensus target is $16.17. The shares closed Thursday’s trading at $15.85.

Brandywine Realty

This is one of the top REITs and a solid buy at current levels. Brandywine Realty Trust (NYSE: BDN) is an office REIT headquartered in Philadelphia that own, develops and operates primarily office buildings in downtown and suburban Philadelphia, Northern Virginia and Austin, Texas.

The company develops, leases and manages an urban, town center and transit-oriented portfolio comprising 184 properties and 25.3 million square feet as of June 30, 2018, which excludes assets held for sale. The analysts note that Brandywine has strong or improving operating conditions across all markets and trades at discount to peers.

Shareholders receive a 4.31% distribution. Merrill Lynch has a price target of $18.50, and the consensus target is $18.05. The shares ended trading on Thursday at $16.71.

Brixmor Property Group

This is the highest yielding REIT in the group and offers a solid total return proposition for investors. Brixmor Property Group Inc. (NYSE: BRX) is an internally managed REIT that owns and operates the largest wholly owned U.S. shopping center portfolio. Brixmor owns 522 community and neighborhood centers, totaling 86.7 million square feet, in 38 states.

The largest real estate concentrations by state are Texas (11%), Florida (10%) and Pennsylvania (7%). The portfolio is primarily the aggregate of Centro Properties Group United States acquisitions from 2005 to 2007. Centro Properties Group was an Australian-based company with two primary investment arms.

Investors receive an outstanding 6.09% distribution. The $19 Merrill Lynch price objective compares with an $18.60 consensus target and the most recent closing price of $18.05.

Simon Property

Simon Property Group Inc. (NYSE: SPG) invests in the real estate markets across the globe. It engages in investment, ownership, management and development of properties. The company primarily invests in regional malls, premium outlets, mills and community/lifestyle centers to create its portfolio.

Through its subsidiary partnership, it owns or has an interest in about 230 properties in the United States and Asia. The company also has a 28.9% interest in Klepierre, a European REIT with over 260 shopping centers in 13 countries.

One key driver of growth will include the more than $1.0 billion of development/redevelopment planned over the next few years. Merrill Lynch also feels that the company’s high-quality portfolio has weathered the retail storm much better than most.

Shareholders are paid a 4.38% distribution. Merrill Lynch has set its price target at $193. The consensus price target is $185.59, and shares ended trading Thursday at $176.79.

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These four REITs all pay outstanding dividends and are among the biggest and best trusts. It is important to remember that a portion of the dividends paid by REITs may constitute a nontaxable return of capital, which not only reduces the unit holder’s taxable income in the year the dividend is received but also defers taxes on that portion until the capital asset is sold.

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