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  • Alex Pettee, CFA

Weekly Outlook: Santa Comes Early For REIT Investors

  • U.S. equity markets declined for the second-straight week while volatility measures soared to the highest levels this year as jittery investors attempted to evaluate the economic impacts of the Omicron variant.

  • Following declines of over 2% last week and suffering the worst two-day decline since October 2020, the S&P 500 slipped another 1.2% on the week with China-exposed companies posting sharp declines.

  • Buoyed by a wave of dividend increases and helped by downward pressure in interest rates and strong housing market data, REITs and homebuilders were among the strongest performers this week.

  • With the countdown to Christmas now underway, Santa delivered some early presents for REIT investors. Four REITs declared special dividends this week while four REITs also hiked their regular distribution rates.

  • Farewell - or perhaps good riddance - to the prison REIT sector. GEO Group dipped after announcing that it will forego REIT status, following a similar corporate restructuring by CoreCivic into a taxable c-corp, concluding a tumultuous 8-year run as REITs.

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Disclosure: Hoya Capital Real Estate advises two Exchange-Traded Funds listed on the NYSE. In addition to any long positions listed below, Hoya Capital is long all components in the Hoya Capital Housing 100 Index and in the Hoya Capital High Dividend Yield Index. Index definitions and a complete list of holdings are available on our website.

Additional Disclosure: It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Data quoted represents past performance, which is no guarantee of future results. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy.

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Hoya Capital Research & Index Innovations is an affiliated index provider and research firm that builds custom indexes tracking U.S. commercial and residential real estate sectors, including indexes tracked by exchange-traded funds (ETFs). 

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