Yahoo Finance Best-Performing REITs In April
Real estate investment trusts (REITs) had a difficult April, with only about 25% of them finishing in positive territory. The Vanguard Real Estate Index Fund ETF (NYSE:VNQ), which includes REITs as well as other real estate-related stocks, was down 6.37%. However, many REITs were notably stronger than the overall index.
Weighing down REITs in April was the Federal Reserve's tougher stance on interest rates remaining higher for longer. Chairman Jerome Powell's April 16 speech set the tone when he talked about the Fed's 2% inflation goal.
"The recent data have clearly not given us greater confidence, and instead indicate that it's likely to take longer than expected to achieve that confidence," he said.
Interest rate-sensitive stocks such as REITs sold off quickly after Powell's remarks but recovered within a few days.
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The best performers often are not the most well-known REITs, and this was apparent over the last four weeks. Take a look at the best-performing REITs in April:
Apartment Income REIT Corp. (NYSE:AIRC), also known as AIR Communities, is a Denver-based residential REIT that owns rental housing communities with 21,674 units in 10 states on both U.S. coasts.
On April 8, Blackstone Inc. (NYSE:BX), via real estate fund Blackstone Real Estate Partners X, agreed to buy Apartment Income REIT Corp. in an all-cash transaction valued at roughly $10 billion, including the assumption of Apartment Income's debt. Blackstone plans to take the entire portfolio private.
The purchase price of $39.12 per share represented a 25% premium to AIRC's April 5 closing price. The deal is expected to close in the third quarter of 2024. As of April 8, Apartment Income suspended its quarterly dividend of $0.45 per share.
Primarily because of the sale, Apartment Income had a total return in April of 20.77%, the highest total among all REITs.
Centerspace (NYSE:CSR) is a Minot, North Dakota-based residential REIT with a focus on the ownership, management, acquisition and redevelopment of apartment buildings. Its portfolio includes 70 apartment complexes with 12,883 apartments across the Midwestern and Mountain states of Colorado, Minnesota, Montana, Nebraska, North Dakota and South Dakota. As of February, Centerspace had an occupancy rate of 94.3%.
On Feb. 20, Centerspace announced that its board of trustees approved a quarterly dividend of $0.75 per share, an increase from $0.73 per share. The annualized dividend of $3 presently yields 4.46%.
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On April 29, Centerspace reported its first-quarter 2024 operating results. Funds from operations (FFO) of $1.23 per share beat the consensus estimate of $1.13. and was above FFO of $1.07 in the first quarter of 2023. Revenue of $64.506 million topped the consensus estimate of $64.381 million and bested first-quarter 2023 revenue of $67.897 million as well.
Centerspace began to rally about a week before the earnings report was released and tacked on another 3.91% the first trading day after the announcement. Centerspace had a total return of 19.68% in April.
Strawberry Fields REIT Inc. (NYSEAMERICAN: STRW) is a South Bend, Indiana-based, self-managed and self-administered healthcare REIT that owns and operates 79 triple-net skilled nursing facilities, assisted living and other post-acute healthcare properties in Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio and a few other states. Strawberry Fields REIT was founded in 2004. After trading over the counter for a long time, it began trading on the New York Stock Exchange in February 2023. Its market cap is $340.29 million.
While there was no news in April to propel Strawberry Fields higher, in mid-March it released its full-year 2023 operating results. FFO was $49.5 million, up from $45 million in 2022. Adjusted funds from operations (AFFO) was $52.7 million, up from $51.1 million in 2022. Net income rose from $16.4 million to $20.2 million year over year and rental income received was $99.8 million in 2023, up from $92.5 million in 2022.
Strawberry Fields is a fast-growing REIT that acquired 24 properties in 2023. Its performance was also assisted by recent overall strength in healthcare REITs.
Strawberry Fields had a total return of 13.84% in April.
Other REITs that performed well in April include Elme Communities (NYSE:ELME), with a total return of 11.47%, BRT Apartments Corp. (NYSE:BRT) with 8.99% and NexPoint Residential Trust Inc. (NYSE:NXRT) at 8.46%.
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