REIT Shares Soar, Still Listed REITs Ended Q3 2019 Trading at a 2.3% Median Discount to NAV
October 3, 2019
Share prices for U.S. equity REITs grew in the third quarter, for the third consecutive quarter of positive returns. The SNL U.S. REIT Equity index finished the quarter with a 7.6% total return, 5.9 percentage points higher than the S&P 500’s 1.7% return for the same period.
Still, according to an October 2, 2019 report by S&P Global, U.S. equity REITs traded at a median 2.3% discount to their consensus S&P Global Market Intelligence net asset value per share estimates at the end of September, a 4.9 percentage-point improvement compared to the 7.2% median discount the sector traded at in the prior month.
The healthcare sector continued to trade at the largest median premium to NAV, expanding to 28.5% at quarter-end. Meanwhile, the “other retail” sector (comprising outlet center and single-tenant retail REITs) as well as the data center and self-storage sectors each traded at a median 15.7% premium to consensus NAV estimates.
At the other end of the spectrum, the regional mall sector continued to trade at the steepest discount to NAV, on a median basis, at 38.9%. CBL & Associates Properties Inc. traded at the largest discount of all REITs at September-end, at 64.9%, while Simon Property Group Inc., the largest mall REIT by market capitalization, traded at a 17.9% discount to its consensus NAV estimate.
The timber and hotel REIT sectors were next, trading at median discounts of 16.9% and 16.8%, respectively, at quarter-end.
W.P. Carey Inc., a sponsor of nontraded REITs in the past, traded at a 38.9% premium to NAV as of September 30, 2019. The closing price for its shares on that date was $89.50 and the consensus NAV estimate according to S&P Global Market Intelligence was $64.45 per share.
Source: S&P Global Market Intelligence
