Some real estate investment trusts (REITs) are hitting new year-to-date lows as the effects of Fed Chair Jerome Powell’s hawkish remarks at this year’s Jackson Hole, Wyoming, retreat sink in. His specific references to a “more restrictive policy” and “some pain” suggest higher interest rates than expected and for a longer period than anticipated.
Since REITs are generally sensitive to rate hikes, it’s not surprising to see a sell-off in the sector post-Jackson Hole. What is surprising, though, is to see the number of REITs hitting new 2022 lows. Take a look at the daily price charts for these five, a few of which are well-known in the real estate community:
Related: This Little Known REIT Has Produced Double Digit Annual Returns For The Past Five Years
Welltower Inc. (NYSE:WELL)
Last week’s low of $75.80 is lower than the mid-June lows and the February low. Note how Welltower has traveled from a peak of $98 in April to the new low. That’s a 22% drop in four months, quite a move for the big healthcare facilities REIT with an average daily volume of 2.28 million shares.
Ventas Inc. (NYSE:VTR)
Last week’s low of $47.24 appears to just slightly take out the mid-June lows and definitely drops below that late January selling. Ventas’ high of $63 in March seems distant in so short a time. It’s a slippage of 25%. If it’s any consolation, the healthcare facilities REIT remains above the December 2021 low of just below $46.
Boston Properties Inc. (NYSE:BXP)
Last week’s low of $78.02 is a new low and represents a nearly 40% drop from the late March high of $130. This office REIT pays a dividend of 4.90%, which makes it vulnerable to interest rate hikes. Boston Properties has an average daily volume of 1.15 million shares.
Kilroy Realty Corp. (NYSE:KRC)
Last week’s low is $47.17. From the March high of $78 to that price is a 38% drop. Kilroy Realty is another office REIT paying a decent dividend: 4.34%. The average daily volume on this one comes to just 812,000 shares.
Independence Realty Trust Inc. (NYSE:IRT)
The low of $19.01 represents a continuation of a downward trend in effect since the April high of $28. That’s about a 32% loss. Independence Realty is a residential REIT paying a 2.88% dividend. It’s actively traded with an average daily volume of 2 million shares.
Downtrending major REITs are not a pleasant sight for investors in the sector. Major REITs hitting new year-to-date lows demonstrate the seriousness of the problem. Turnarounds could show up anytime, but fighting the trend can be difficult. Powell’s prediction for “some pain” is already evident in these rate-sensitive REITs.
Other New York Stock Exchange-traded REITs are doing better than these five, but few are hitting new highs and most have the look of downtrending prices on daily charts.
Today’s Real Estate Investing News Highlights
- The target IRR has been increased to 18.4% for the Baypoint Apartments offering on RealtyMogul. The investment has a target cash yield of 7.9% and an estimated hold period of 4 years.
- The Flagship Real Estate Fund by Fundrise has acquired a townhome rental community in Charlotte, NC, for approximately $6.3 million. The Flagship Real Estate Fund has produced YTD returns of 6.9% so far in 2022.
Find more news and real estate investment offerings on Benzinga Alternative Investments
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