U.S. equity real estate investment trusts saw a slight fall in average short interest in January, posting a 5-basis-point drop to 3.2% of shares outstanding, according to S&P Global Market Intelligence data.

Hotels gain, advertising REITs lose short interest

Hotel REITs logged the biggest increase in average short interest across all property types in January, rising 39 basis points from the previous month to 4.2% of shares outstanding as of Jan. 31.

Hotel owners RLJ Lodging Trust and Pebblebrook Hotel Trust posted the highest gains in short interest among all U.S. REITs, with both increasing 3.3 percentage points to 8.1% and 12.1% of their respective shares outstanding as of January-end. The recent short interest hikes placed the two hotel REITs in the top 10 most shorted REIT stocks by month-end.

Another hotel REIT, Park Hotels & Resorts Inc., was on the list of REITs with the biggest short-interest gains relative to shares outstanding, up 1.2 percentage points to 8.1% of its shares outstanding.

The residential sector followed with an increase in average short interest of 6 basis points to 2.3% of shares outstanding. Shopping center REITs came in third, with a 5-basis-point hike to 2.2% of shares outstanding.

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On the other hand, the advertising segment lost 52 basis points in average short interest to 4.2% of shares outstanding as of January-end, the biggest drop across all property types. Industrial REITs followed with a 46-basis-point decline to 3.2% of outstanding shares.

Top REITs by change in short interest

Office-focused Kilroy Realty Corp. had the third-biggest increase in short interest in January, after RLJ Lodging and Pebblebrook Hotel, with a 1.7-percentage-point hike to 4% of its shares outstanding.

Another office REIT, Vornado Realty Trust, saw the largest decline in short interest relative to shares outstanding, down 3.6 percentage points to 7.9% of its shares outstanding.

REITs with largest short positions

Healthcare-focused Medical Properties Trust Inc. continued to be the most shorted U.S. REIT stock, with 102.7 million shares sold short as of Jan. 31, or 17.2% of its shares outstanding. Office REIT SL Green Realty Corp. and hotel-focused Pebblebrook Hotel followed, with short interests at 13.5% and 12.1% of shares outstanding, respectively.