The total market value of AEW Capital Management LP's real estate investment trust portfolio grew 14.9% to more than $2.74 billion in the fourth quarter of 2023, as the share prices of nearly all the firm's positions increased.
New additions
AEW added five new positions to its REIT portfolio in the recent quarter, with its largest new addition being ground lease-oriented Safehold Inc., valued at $25.6 million at year-end.
The firm also bought back into COPT Defense Properties, which it sold out of in the first quarter of 2023. As of Dec. 31, the firm's holding in COPT Defense Properties was valued at $17.9 million.
Other new additions to AEW's investment portfolio included residential-focused Tricon Residential Inc., which recently agreed to be acquired by affiliates of Blackstone Inc., as well as industrial REIT LXP Industrial Trust and multifamily REIT Apartment Income REIT Corp.
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Position increases
In addition to the new positions, AEW increased its share count in 17 of its existing REIT positions.
AEW more than doubled its stakes in multifamily REIT Veris Residential Inc. and cold-storage-oriented Americold Realty Trust Inc., valued at $24.5 million and $19.0 million at quarter-end, respectively.
The firm also boosted its share count in diversified net lease REIT W. P. Carey Inc. by 92.7% to 296,460 shares, a stake worth $19.2 million at year-end.
AEW increased its stake in healthcare REIT Welltower Inc. by 52.0% during the quarter, a stake valued at $105.9 million as of Dec. 31.
Position decreases and exits
On the other hand, AEW dropped two REITs from its investment portfolio, industrial REIT First Industrial Realty Trust Inc. and multifamily REIT Independence Realty Trust Inc.
Additionally, AEW pared back its share count in 24 of its REIT holdings.
The investment firm sold nearly all its shares in Healthcare Realty Trust Inc. during the fourth quarter, dropping its stake by 95.1% to 95,710 shares, an investment valued at $1.6 million at year-end.
AEW also sold 83.9% of its shares in single-tenant retail REIT NETSTREIT Corp., while also dropping its stake in self-storage REIT CubeSmart by 43.7%.
Top holdings
Industrial REIT Prologis Inc. remained the firm's largest holding by market value, at $325.6 million as of Dec. 31.
Datacenter REIT Equinix Inc. and multifamily REIT AvalonBay Communities Inc. followed as the second- and third-largest holdings, valued at $250.3 million and $144.1 million, respectively.
By property sector, AEW held the highest exposure to residential real estate companies, totaling $648.2 million in aggregate. The specialty sector — consisting of casino, communications and datacenter REITs — followed next, at $584.6 million in aggregate.
