Real estate investment trusts had a nice run in 2021 but it’s been rough going for the sector ever since. Today, these 5 REITs continued the downward trend, reaching brand new 12-month lows even as the group in general has bounced off of late October lows.
Each situation has its own group of factors but the Fed’s practice of higher interest rates for longer had a big effect on real estate investment trusts. Higher borrowing costs tend to discourage new investors and that has a negative effect on underlying property values.
While other REITs may be finding reasons for new optimism, the 5 listed below are not among them.
REITs With New Lows.
Braemer Hotels and Resorts has a daily price chart that looks like this:
The steadily down trending red line is the 200-day moving average, above which the price is unable to trade for months. During September and October, the REIT attempted to rally and stay above the 50-day moving average but in November, the bottom fell out. The relative strength index (RSI, below the price chart) is showing a positive divergence.
Americold Realty Trust invests in mostly industrial properties. Here’s the daily price chart:
From a high in September of $33.50 to the current price of $23.39 represents a drop of 27% in less than 3 months. You can see that the 50-day moving average crossed below the 200-day moving average in early November. The REIT now trades lower than it did at the March low.
CorEnergy Infrastructure Trust is a specialty REIT that, according to its website, focuses on “identifying and acquiring critical energy infrastructure including pipelines, storage terminals, offshore platforms, rights-of-way and electric transmission and distribution lines.”
The daily price chart is here:
It’s been trading downward for months as indicated by the direction of the 200-day moving average. The REIT’s been unable to close above its 50-day moving average since August when it became a penny stock (trades below one dollar). The relative strength index is down in the deep “oversold” area.
Medical Properties Trust
After a late July peak of $10.50, the REIT has been unable to recover. The gap down in early August took it below the 50-day moving average where it continues to trade. Price is now far below the down trending 200-day moving average. The relative strength index is showing a positive divergence.
Pebblebrook Hotel Trust now goes for half its book value. The daily price chart looks like this:
This REIT peaked in late July at just under $15.75 and today dropped to just below $11.50 before bouncing back a bit into the close. Pebblebrook trades significantly below both the down trending moving averages.