Losers Of REIT Earnings Season
After covering the Winners of REIT Earnings Season earlier this week, Part 2 of our Earnings Recap focuses on the worst-performing property sectors and common threads shared by these laggards.
While there were upside standouts and some solid reports within these lagging property sectors, the losers of REIT earnings season included: Office, Mortgage, Land & Agriculture, Retail, and Non-Traded REITs.
For Office and Mortgage REITs, dividend cuts have begun to mount, with 15 combined reductions between the two sectors this year. Other sectors have seen increases outpace cuts by 44-to-1.
Commodities disinflation was a major theme for the agriculture-focused REIT sectors - farmland, timber, and cannabis REITs. From their peaks, lumber prices are down 75% and grain prices are down nearly 40%.
'Flight to quality' was a major theme this earnings season, with small and micro-cap REITs significantly lagging larger-cap names. For retail REITs, the high-profile bankruptcy of Bed Bath & Beyond overshadowed an otherwise solid slate of reports showing buoyant rent growth.
