REIT
The prices of real estate investment funds are once again rejoicing in the expectation of an upcoming reduction in interest rates by the Fed (1st quarter 2024?). Treasury yields are already falling, with the 30-year returning to 4.44% after reaching a remarkable 5% in October. This is just “expected” good news for rate-sensitive sectors.
REITs definitely fall into this category because lower rates would mean lower costs for lenders, which would attract more buyers. They have recovered strongly from their October lows as a benchmark. Selected Real Estate Sector SPDR Funds clearly shows on this daily price chart:
Real Estate Select Sector SPDR Fund Daily Price Chart, 12 1 23.
The move from the late October low of $32 to the December 1 high of $38 represents a gain of about 16% in just over a month.
The main takeaway, from a price chart analysis perspective, is that it is now trading above its 50-day moving average (the blue line) and, thus, its moving average of 200 days (the red line).
This is an ETF traded on the NYSE that consists of 31 real estate investment trusts, a way to invest in sector diversification.
4 REITs Reaching New Highs:
Chicago Atlantic Real Estate Financing is a Nasdaq-listed mortgage REIT with a market cap of just $248 million. The average daily volume is only 81,000 shares. The daily price chart looks like this:
Chicago Atlantic Real Estate Finance Daily Price Chart, 12 2 23.
After dropping to $11.80 in late May, Chicago Atlantic is now trading at $15.66, a rise from that low to the current high of 25%. You can see that the 50-day moving average crossed above the 200-day moving average in early June and the price is now trading above both metrics.
EQIX
is a specialty REIT that focuses on data centers. The Nasdaq-listed company has a market capitalization of $77.40 billion and pays a dividend of 1.74%. Here is the daily price table:
Equinix Daily Price Chart, 12 2 23.
This bottomed in late October just below $680 and hit a new high of $824 for a 17 1/2% gain from then to now. You can see by the red dotted line how the previous resistance level, from July at $812, is a thing of the past. The REIT is trading well above both significant moving averages.
Capital of rhythm is a NYSE-listed mortgage REIT with a market cap of $5.10 billion and pays a dividend of 9.47%. It trades at 86% of its book value with a price-to-earnings ratio of 7.27. The daily price chart is here:
Rithm Capital Daily Price Chart, 12 2 23.
Those who were wise enough to buy shares in late March at $6.80 and hold them up to $10.56 this week made a 36% profit. Note that the 50-day moving average crossed above the 200-day moving average in June and the price continues to trade above both.
RPT Real Estate invests primarily in outdoor shopping centers and is listed on the New York Stock Exchange with a market capitalization of $969 million. Investors receive a dividend of 4.52%. The daily price chart looks like this:
RPT Realty Daily Price Chart, 12 2 23.
That represents a jump from $8.50 in late March to $12.09 on Friday, a gain of nearly 30% from the low to today. You can see that the 50-day moving average moved above the 200-day moving average in early July. RPT Realty’s price continues to trade well above both averages.