Buying The REIT Correction
- At the halfway point of another newsworthy REIT earnings season, the majority of REITs are now in "correction" territory with several of the highest-flying REITs in "bear market" territory.
- Consistent with the trends seen across the broader equity market, REIT earnings have generally been better than expected with the vast majority of REITs topping estimates and raising full-year guidance.
- As anticipated in our Earnings Preview, dividend hikes have been a major theme as nearly 30 REITs have already raised their payouts this year following 130 dividend hikes last year.
- Residential REITs continue to be upside standouts of earnings season thus far as rents continue to soar by double-digit rates across essentially all markets and segments of the rental markets.
- Within the REIT sector this year, performance trends have been driven entirely by macroeconomics and the growth-to-value rotation. Sectors with the strongest fundamentals have lagged this year while office and hotel REITs have been leaders.
