S&P/ASX 200 Index (ASX: XJO) stock Charter Hall Long WALE REIT (ASX: CLW) looks to me like a compelling ASX dividend share paying excellent passive income.

High interest rates have hurt the share prices of the real estate investment trust (REIT) sector. Most REITs carry a lot of debt on their balance sheets, so higher rates translate into heightened interest costs.

Here's why this particular property business could be worth owning to build investment cash flow.

Most REITs focus on one type of commercial property, such as retail, office or industrial.

A big positive about this ASX 200 stock's portfolio is how diversified it is. Charter Hall Long WALE REIT owns landmark city offices, well-connected industrial and logistics facilities, service stations, Bunnings Warehouse properties and so on.

What links them together is the long-term rental contracts, resulting in a weighted average lease expiry (WALE) of more than 10 years. This gives a lot of visibility (and stability) of the rental income.

In the FY24 first-half result, it achieved a 4.3% weighted average rent review, which is a pleasing rate of rental growth in the current economic circumstances.

The ASX 200 stock typically pays out 100% of its rental profit each year as a distribution, creating a large distribution yield.

With the contracted rental growth (fixed or inflation-linked annual increases, depending on the property), it doesn't need to retain earnings to deliver growth for investors.

For FY24, it has guided operating earnings per security (EPS) and a distribution per security of 26 cents. At the current Charter Hall Long WALE REIT share price, that represents a distribution yield of 7%.

It's challenging to say what the ASX 200 stock's property portfolio is actually worth today amid the high interest rates. The only way to truly know would be to try to sell all of its properties, which is not likely to happen.

Interestingly, the Charter Hall Long WALE REIT share price has risen 17% in the past six months, as the chart below shows, despite the high interest rates.

At 31 December 2023, the business had 94% of its portfolio independently valued, resulting in a $306 million, or 4.5%, decrease compared to the prior balance sheet values. In other words, it has accounted for a slight reduction in its property values.

With that reduction, the net tangible assets (NTA) came to $5.14 at December 2023. The Charter Hall Long WALE REIT share price is at a discount of close to 30% to the NTA figure.

If interest rates start coming down sooner rather than later, this ASX 200 stock may be able to provide a mixture of a good passive income yield and capital growth.