Short interest down for US REITs in March, up for advertising REITs

Average short interest in US equity real estate investment trusts decreased moderately in March, according to S&P Global Market Intelligence data.

US REITs' short interest fell 3 basis points month over month to 3.7% of shares outstanding on average in March. Advertising REITs had the largest increase in average short interest among property types, continuing the trend from February.

Advertising REITs see short surge

Average short interest in the advertising sector increased 66 basis points from the prior month to 7.2% of shares outstanding as of March 31.

The other retail segment — which consists of single-tenant and outlet centers — had the second-highest average short interest among US equity REITs, at 5.4% of shares outstanding.

The hotel sector came in third, with an average short interest of 5.2% of shares outstanding at the end of March, unchanged from February.

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The shopping center segment logged the biggest decline in March compared to the previous month, down 1.2 percentage points to 3.3% of shares outstanding on average.

The self-storage sector had the lowest average short interest at 1.8% of shares outstanding, followed by timber sector REITs, which had an average short interest of 1.9% of shares outstanding.

Sweeping changes

As of March 31, hotel REIT Ryman Hospitality Properties Inc. posted the largest month-over-month increase in short interest, rising by 4.8 percentage points to 10.0% of shares outstanding.

JBG Smith Properties, which registered the largest short interest increase in February, was ranked second in the list of REITs with the largest increase in short interest of shares outstanding in March. The diversified REIT posted a short interest of 14.4% of shares outstanding, up 3.7 percentage points from the previous month.

Single tenant REIT Four Corners Property Trust recorded a 6.7% short interest of outstanding shares in March, an increase of 2.6 percentage points compared to February.

Industrial REIT Plymouth Industrial REIT Inc. ended March with short interest at 3.2% of shares outstanding.

In March, the office REITs with the largest increases in short interest of shares outstanding were Kilroy Realty Corp., with a 1.8-percentage-point increase to 7.8%; Douglas Emmett Inc., with a 1.8-percentage-point increase to 13.0%, making it the third most-shorted REIT overall for the month; Orion Properties Inc., with a 1.4-percentage-point increase; and Highwoods Properties Inc., with a 1.3-percentage-point increase.

The top three REITs with the steepest percentage declines in short interest of shares outstanding belonged to the shopping center sector.

Acadia Realty Trust posted a 7.8-percentage-point decrease in short interest to 4.7% of shares outstanding as of March-end. This was the largest month-over-month drop among REITs.

Wheeler Real Estate Investment Trust Inc. had the second-highest month-over-month decline, with a 4.9-percentage-point fall to 10.7% of shares outstanding in March.

SITE Centers Corp. followed with a month-over-month decline of 3.8 percentage points in short interest to 5.4% of shares outstanding in March.

Medical Properties Trust Inc. remained the most-shorted US REIT stock in March, but it was also among the REITs with the largest drop in short interest, with a 1.9-percentage-point decline to 28.8% of shares outstanding.