REIT Replay: US REIT share prices continue to fall in week ended April 11

US equity real estate investment stocks underperformed the broader market during the week ended April 11.

The Dow Jones Equity All REIT index ended the recent week down 0.66%, while the MSCI US REIT index dropped a slight 0.27%.

The broader stock market indexes jumped over the recent week, with the S&P 500 up 5.70% and the Dow Jones Industrial Average up 4.95%.

Among the Dow Jones US real estate sector indexes, only the hotel and retail sector indexes closed the week in the black, with the hotel sector index up 1.33% and the retail index slightly up 0.34%. Conversely, the office index logged the largest decline over the week, down 3.23%. The industrial and apartment indexes followed with declines of 1.92% and 0.73%, respectively.

Office REIT Easterly Government Properties Inc., which leases properties to various US government agencies, logged the largest share-price decline during the recent week among all US REITs with at least $200 million in market capitalization, down 19.64%. On April 9, the REIT announced a 32% reduction in its quarterly dividend rate to 18 cents per share. Within the REIT's press release on the matter, Easterly Government Properties noted that its new dividend policy is designed to align with best practices of other net lease REITs. The REIT is targeting a core funds from operation (FFO) payout ratio in the range of 55% to 65%, and a cash available for distribution (CAD) payout ratio in the range of 65% to 75%. As Easterly Government grows its core FFO and CAD, the REIT intends to keep these payout ranges.

Ground lease-oriented Safehold Inc. and office REIT Hudson Pacific Properties Inc. followed with share-price declines of 19.60% and 15.89%, respectively.

By contrast, information storage-oriented REIT Iron Mountain Inc.'s share price grew 8.10% during the recent week, the largest increase within the US REIT sector. Advertising REIT Lamar Advertising Co. and hotel REIT Chatham Lodging Trust ranked second and third with share-price gains of 7.60% and 5.81%, respectively.