Thanksgiving week brought no major news regarding either REITs or interest rates, leading most REIT stocks to respond positively. Only 29 of the 175 stocks we track (17 percent) went down, and all have responded positively from a sector standpoint. This was, eventually, a festive week, with markets showing a positive attitude towards REITs.
Last week, all 175 stocks returned a 1.3 percent median (the MSCI US REIT being approximately 1 percent) — also the sector median returns except for lodging and healthcare, which increased 3.1 and 2.5 percent respectively, leading the sectors. Conversely, the diversified sector has been virtually flat.
Ashford Hospitality Trust, which has had the worst stock return among lodging REITs this year, rebounded after a mid-November drop. Last week, the stock returned 6.9 percent. Actually, most lodging REITs have tanked lately owing to concerns about industry oversupply. Plus, Q3 performance has not excited analysts or investors as the demand for some REITs was lower than expected. We have been closely monitoring the sector, which sports one of the best REIT growth figures.
As to decreasing returns, Withrop Realty Trust was the week’s lowest performer, having been in liquidation and estimated the liquidation of its net assets to produce $15.17/common-share distributions. Friday, the stock closed trade at $13.63. Rather than narrow the gap between liquidation and share prices, the 6.2 percent drop actually widened it to 10 percent.