The latest year-to-date tally of dividend announcements by US real estate investment trusts shows four REITs suspending their dividends and a handful of others reducing their payouts.

This is a reversal of the trend recorded at the end of August, when more than one-third of the overall US REIT sector had declared higher dividends since the start of 2023, according to an analysis of S&P Global Market Intelligence data.

Hudson Pacific, 3 other REITs suspend dividends

After reducing its dividend by half on June 9, office-focused REIT Hudson Pacific Properties Inc. announced Sept. 7 that it will suspend the quarterly dividend on its common stock.

"As we manage through current market conditions, including addressing the impact of the ongoing Hollywood strike, the board believes that suspending our common stock dividend is a prudent decision," Hudson Pacific Chairman and CEO Victor Coleman said.

Diversified REIT Medalist Diversified REIT Inc. said July 12 that it will temporarily halt its common stock and preferred stock dividends for at least the next six months.

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Office REIT Vornado Realty Trust on April 26 announced the suspension of its common stock dividend until the end of 2023. The company said it will pay the 2023 dividend in either cash or a combination of cash and securities after finalizing its 2023 taxable income, which includes the impact of asset sales. It trimmed its quarterly dividend by nearly 30% in January.

CorEnergy Infrastructure Trust Inc. said Feb. 6 that it will halt dividend payments on its common stock and 7.375% series A cumulative redeemable preferred stock. The suspension was mainly because of declining volumes and higher costs in the energy infrastructure REIT's California systems.

Apart from these four REITs that announced dividend pauses in 2023, five others are not paying regular dividends on their common stock following suspensions announced in previous years.

Handful of office REITs slash dividends

Eight REITs have lowered their dividend payments thus far in 2023, five of which came from the office sector.

The largest cut was announced June 15 by office REIT Paramount Group Inc., which reduced its quarterly payout by 54.8% to 3.5 cents per common share. Paramount Group said the lower dividend will allow the REIT to save $40 million in additional cash annually.

Office Properties Income Trust declared a 54.5% cut to its quarterly distribution to 25 cents per share April 13. The REIT decided to reduce the dividend to a sustainable level of $1 per share annually amid ongoing challenges in the office sector.

"Headwinds in the office sector remain with added pressure as a result of corporate cost cutting, elevated sublease space, a challenging financing environment and continued macroeconomic uncertainty," Office Properties Income Trust President and COO Christopher Bilotto said on an earnings call April 27.

The dividend cut happened a couple of days after the REIT announced its proposed all-stock acquisition of healthcare REIT Diversified Healthcare Trust on April 11. The deal eventually fell through with both REITs mutually agreeing to terminate the merger agreement Sept. 1.

City Office REIT Inc. on May 5 announced a dividend of 10 cents per share, down 50% from the previous payout.

"Given the backdrop of today's economic conditions, we feel it is prudent to adjust the dividend at this time," City Office REIT CEO James Farrar said, adding that the new dividend rate will allow the company to retain additional liquidity of $16 million per year.

Two other office REITs, Piedmont Office Realty Trust Inc. and Brandywine Realty Trust, lowered their quarterly dividend payments by 40.5% and 21.1%, respectively.

The most recent company to reduce its dividend was diversified REIT Global Net Lease, which declared a 35.4-cent-per-share quarterly distribution Oct. 2, reflecting an 11.5% decline from the previous payout.

Other REITs that cut dividend payments year to date include healthcare REIT Medical Properties Trust Inc. and diversified REIT Gladstone Commercial Corp., with reductions of 48.3% and 20.3%, respectively.

More than 50% of REIT dividends exceed pre-pandemic levels

Roughly 53.4% of publicly traded US REITs are paying higher dividends compared to their pre-pandemic levels reported at the end of 2019, according to Market Intelligence data. Some 6% of REITs are paying out the same amount of dividends as they did before the pandemic. Meanwhile, dividends paid by approximately 40.6% of the overall REIT sector are still lower than their pre-pandemic levels.

Single-family rental REIT American Homes 4 Rent leads the list of REITs with the largest increase in dividends since the end of 2019, more than quadrupling its payout to 22 cents per share. Three REITs have doubled their dividend payments since 2019: communications-focused SBA Communications Corp., industrial-focused Rexford Industrial Realty Inc. and single-family rental REIT Invitation Homes Inc.