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.