US equity real estate investment trusts posted a slight increase in average short interest in July, with a 5-basis-point rise to 3.6% of shares outstanding, according to S&P Global Market Intelligence data.

Farmland, shopping center segments see largest gains

The farmland segment had the biggest hike in average short interest across all property types, increasing 42 bps from the previous month to 4.8% of shares outstanding as of July 31.

The recent hike was attributed to the increases in short interest for both Farmland Partners Inc. and Gladstone Land Corp.

Farmland Partners' short interest rose 53 bps to 7.5% of shares outstanding in July. The company was among the 20 most shorted REIT stocks for the month, ranking 16th.

Gladstone Land posted a 32-basis-point hike to 2.0% of shares outstanding during the same period.

Shopping center REITs had the second-largest rise in average short interest, up 40 bps to 2.5% of shares outstanding as of July 31.

Shopping center landlord Wheeler REIT Inc. not only led the increase within its own sector, but it also had the greatest hike in short interest across all US REITs, at 5.5 percentage points to 7.8% of its shares outstanding as of July-end. This recent increase also landed the company within the top 20 most shorted REIT stocks by month-end.

Five other shopping center-focused REITs also saw gains in short interest during the same month — Kite Realty Group Trust by 59 bps, Brixmor Property Group Inc. by 57 bps, Kimco Realty Corp. by 30 bps, Phillips Edison & Co. Inc. by 27 bps and Urban Edge Properties by 8 bps.

The healthcare sector came in third, with an increase of 27 bps in average short interest to 4.6% of shares outstanding at July-end.

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On the other hand, the datacenter sector posted the steepest drop in average short interest across all property types, declining 41 bps from the previous month to 2.1% of shares outstanding as of July 31.

The self-storage segment came in second with a 39-basis-point drop in average short interest to 2.1% of shares outstanding. It was followed by the advertising sector, which posted a decrease of 37 bps to 3.0% of shares outstanding on average.

REITs with the most change in short interest

Following Wheeler REIT Inc., healthcare-focused Medical Properties Trust Inc. had the next-largest increase in short interest among all US REITs in July, rising 3.8 percentage points from the prior month. Office REIT Net Lease Office Properties took the 3rd spot as it posted a 3.5-percentage-point hike to 13.1% of shares outstanding as of July-end.

Office-focused Office Properties Income Trust saw the largest short interest loss in July, with a 5.0-percentage-point drop to 10.7% of shares outstanding. Office REIT SL Green Realty Corp. followed with a short interest loss of 3.1 percentage points.

REITs with largest short positions

Healthcare-focused Medical Properties Trust remained the most-shorted US REIT stock, with 218.3 million shares sold short, or 36.4% of shares outstanding.

Office REIT SL Green Realty Corp. was the second most-shorted US REIT stock with 16.6% of shares outstanding sold short, followed by another office REIT, Hudson Pacific Properties Inc., at 16.0% of shares outstanding.