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NAV Monitor: US equity REITs trade at median 19.4% discount to NAV on July 1

July 8, 2022

NAV Monitor: US equity REITs trade at median 19.4% discount to NAV on July 1

July 8, 2022

NAV Monitor: US equity REITs trade at median 19.4% discount to NAV on July 1

July 6, 2022 | Ronamil Portes | S&P Capital IQ, Market Intelligence

Publicly listed U.S. equity REITs closed the first trading day in July at a 19.4% discount to their consensus S&P Capital IQ net asset value per-share estimates, a 4.7-percentage-point decline from the 14.7% discount at which they traded as of May-end.

Regional malls saw biggest median discount

Regional mall REITs continued to trade at the steepest median discount to NAV, at 50.9%. Within this sector, Macerich Co. traded at a discount of 63.4%, making it the second-largest discount to NAV among all U.S. equity REITs with above $200 million market capitalization. Simon Property Group Inc., the largest mall REIT by market capitalization, also traded at a huge discount of 38.4%.
 
The office sector also traded at a large discount next to the regional mall sector, at a median of 42.6%. Office REIT Hudson Pacific Properties Inc. closed July 1 at $15.30, 63.6% lower than its consensus NAV estimate of $42.07, the largest discount to NAV among all U.S. equity REITs with above $200 million market capitalization. Other office REITs included in the list of top overall discounts were Office Properties Income Trust at 59.3%, Paramount Group Inc. at 53.5% and SL Green Realty Corp. at 53.3%.

Farmland, communications, casino got median premiums

The farmland segment was still leading the premium list, trading at a median of 9.8%. Land owner Gladstone Land Corp., single-handedly lifted the farmland sector’s median, trading at a premium of 21.2%, the fourth-largest premium among all U.S. equity REITs above $200 million market capitalization. On the other hand, farmland owner Farmland Partners Inc. traded at a discount of 1.5%, closing July 1 at $13.74.

Communication REITs came in second at a median premium of 6.8%, followed by the casino sector at 3.7%.

Multifamily-focused Bluerock Residential Growth REIT Inc. topped the list of REITs with the highest premiums across all sectors, trading at 31.4%. Healthcare REITs Welltower Inc. and LTC Properties Inc. followed, trading at premiums of 28.7% and 23.5%, respectively.

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