REITs end lower than last week in absence of a positive catalyst (BATS:REM)

REITs ended lower than last week in the absence of a positive catalyst, underperforming broader markets for the 2nd consecutive week.

The FTSE Nareit All Equity REITs index declined by 2.08%, while the Dow Jones Equity All REIT Total Return Index fell by 2.07%. FTSE NAREIT Mortgage REITs fell by 1.08%.

The broader Real Estate Select Sector SPDR ETF was also down by 2.12%.

Meanwhile, S&P 500 gained by 1.17%.

Short interest on equity REITs continued to decline, with the sector posting an average short interest of 3.3% of the total float in December, a report by S&P Global Market Intelligence showed. The figure stood at 3.6% in November.

Industrial REIT Prologis (PLD) kicked off the earnings season for REITs with a not-so-impressive financial result. The company\’s Q4 earnings failed to beat the average analyst estimate, while the 2024 guidance range indicated that it could fall short of the Wall Street consensus.

Mortgage REIT AGNC Investment (AGNC) is also expected to post a decline in Q4 earnings next week.

The Blackstone-Tricon Residential deal announcement helped the rental housing segment gain on Friday, but the residential subsector fell by 1.64% over the course of the week.

Among subsectors, Infrastructure saw the steepest decline, followed by Health Care. The former declined by 3.27% and the latter by 3.00%.

A notable outlier for the week was Lodging/Resorts, which gained by 1.41%. A major hotel REIT, Pebblebrook Hotel Trust (PEB), announced strong December results today, and said Q4 adjusted FFO per share is expected to beat its prior outlook.

Power REIT (PW) was a significant laggard among companies, declining by ~13% this week in value. Net Lease Office Properties (NLOP) was the biggest gainer, increasing by ~22% from last week.

Here is a look at the subsector performance for the week: