REITs Lead Quarter-End Rally

Summary

• U.S. equity markets closed-out a volatile first-half at their highest-levels of the year as investors cheered data showing continued resilience in economic activity alongside further signs of cooling inflationary pressure.
• Rebounding from its worst week since March, the S&P 500 advanced 2.3% to close at its highest-levels since April 2022. The Mid-Cap 400 and Small-Cap 600 each rallied over 4%.
• Lifted by a recovery in the most beaten-down property sectors, real estate equities led the rally on the week. The Equity REIT Index advanced 4.3% while Mortgage REITs surged 6%.
• Leading a sharp rebound this week across the office REIT sector, SL Green rallied nearly 30% after it announced that it sold a 49.9% interest in 245 Park Avenue to Japanese developer Mori Trust at a gross asset valuation of $2.0 billion - nearly double the valuation implied by public market pricing of office REITs.
• Prologis - the largest industrial REIT - rallied nearly 5% this week after it announced a $3.1 billion deal to acquire from Blackstone nearly 14 million square feet of industrial properties from its opportunistic real estate funds. Blackstone is reportedly also seeking to sell its BREIT casino properties as it struggles to meet investor redemption requests.
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Corri Seizinger

Analyst’s Disclosure:I/we have a beneficial long position in the shares of RIET, HOMZ, ALL HOLDINGS IN THE INCOME BUILDER REIT FOCUSED INCOME & DIVIDEND GROWTH PORTFOLIOS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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