Funtap
Real estate investment trusts, or REITs, continued to lower their net asset value discount in June as investor sentiment improved on the back of increased hopes for a near-term rate cut.
Traders see a 66.5% probability of a September 25-basis-point rate cut now, compared to 47.0% at the beginning of June, according to the CME FedWatch Tool.
REITs logged a 15.5% median discount to consensus NAV per share estimate as of June 28, compared to 16.5% at May 31 and 19.1% as of April-end, data from S&P Global Market Intelligence showed.
Hotel posted the largest discount to NAV estimates among subsectors, with their average median discount to NAV standing at 30.7% as of June-end, the report noted.
Office is said to have been the next on the list, with an average median discount of 29.9%.
Datacenter was an outlier, with a premium to NAV of 9.6%.
Industrial Logistics Properties Trust (ILPT) reportedly logged the largest discount to its consensus NAV per share estimate, among REITs with a market capitalization of $200M and above. The industrial REIT closed the month with a discount of 71.8% to its $13.07 consensus NAV estimate at $3.68.
Orion Office REIT (ONL) finished at $3.59, a discount of 70.6% to the $12.22 consensus NAV estimate.
Hudson Pacific Properties (HPP), Brandywine Realty Trust (BDN), RLJ Lodging Trust (RLJ), Peakstone Realty Trust (PKST), BRT Apartments (BRT), Piedmont Office Realty Trust (PDM), Global Net Lease (GNL) and JBG SMITH Properties (JBGS) were the other notable losers.
Meanwhile, healthcare REIT Welltower (WELL) emerged as a winner, ending June 28 at $104.25. The price represents a premium of 58.8% to WELL’s consensus NAV estimate of $65.67.
Iron Mountain (IRM) followed, closing June at $89.62, a premium of 43.3% to the $62.53 consensus.
Other notable winners in the list were CareTrust REIT (CTRE), Omega Healthcare Investors (OHI), National Health Investors (NHI), Essential Properties Realty Trust (EPRT), Sabra Health Care REIT (SBRA), Digital Realty Trust (DLR), SL Green Realty (SLG) and Ventas (VTR).