REIT, real estate
Real estate investment trusts had a great year in 2021, but since then the sector has struggled. Today, these 5 REITs continued their downward trend, hitting a brand new 12-month low, even as the group in general rebounded from late October lows.
Each situation has its own set of factors, but the Fed’s practice of higher interest rates for a longer period of time has had a big effect on real estate investment trusts. Higher borrowing costs tend to discourage new investors, which has a negative effect on the underlying value of properties.
While other REITs may be finding reason for renewed optimism, the five companies listed below are not among them.
REITs with new lows.
Hotels & Resorts in Braemer has a daily price chart that looks like this:
Braemer Hotels and Resorts Daily Price Chart, 11 12 23.
The constantly falling red line is the 200-day moving average, above which the price cannot trade for months. In September and October, the REIT attempted to rally and stay above the 50-day moving average, but in November the bottom fell out. The Relative Strength Index (RSI, below the price chart) shows positive divergence.
Americold Real Estate Trust invests primarily in industrial properties. Here is the daily price table:
Americold Realty Trust Daily Price Chart, 11 13 23.
From a high of $33.50 in September to the current price of $23.39, this represents a 27% decline in less than 3 months. You can see that the 50-day moving average moved below the 200-day moving average in early November. The REIT is now trading lower than the March low.
CorEnergy Infrastructure Trust is a specialized REIT which, according to his website, focuses on “the identification and acquisition of critical energy infrastructure, including pipelines, storage terminals, offshore platforms, rights-of-way, and electrical transmission and distribution lines.”
The daily price chart is here:
CorEnergy Infrastructure Trust daily price chart, 11 13 23.
It has been trending downward for months, as indicated by the direction of the 200-day moving average. The REIT has not been able to close above its 50-day moving average since August, when it became a penny stock (trading below a dollar). The Relative Strength Index is falling in the deep “oversold” zone.
MPW
invests in health establishments. Here is the daily price table:
Medical Properties Trust Daily Price Chart, 11 13 23.
After peaking at $10.50 in late July, the REIT failed to recover. The falling gap in early August took it below the 50-day moving average where it continues to trade. The price is now well below the downward 200-day moving average. The Relative Strength Index shows positive divergence.
Pebblebrook Hotel Trust is now worth half its book value. The daily price chart looks like this:
Pebblebrook Hotel Trust Daily Price Chart, 11 13 23.
This REIT peaked in late July at just under $15.75 and fell today to just below $11.50 before rebounding a bit at the close. Pebblebrook is trading significantly below both downtrending moving averages.