Winners and Losers in Q3 2017 Returns Among Formerly Nontraded REITs
October 3, 2017 | James Sprow | Blue Vault
Several listed REITs that began their lives as nontraded REITs were among the top performers among all listed REITs with market caps greater than $200 million in the third quarter of 2017, according to SNL. Spirit Realty Capital (SRC) which was originally Cole Credit Property Trust II had a Q3 2017 total return of 18.1%. Other former nontraded REITs with excellent results among listed REITs in Q3 2017 were CatchMark Timber Trust (CTT) at +12.2% and Retail Properties Trust of America (RPAI) at +9.9%. CatchMark began its life as Wells Timberland REIT before listing in 2015 and RPAI is the former nontraded REIT Inland Western Retail Real Estate Trust which listed in 2012.
The SNL U.S. REIT Equity Index generated a 1.0% total return during the third quarter, underperforming the S&P 500’s 4.5% return for the quarter. Listed REITs also underperformed the S&P 500 on a year-to-year basis. As of September 29, the SNL U.S. REIT Equity Index generated a 5.9% return year-to-date compared to the 14.2% total return of the S&P 500.
Among the listed US REIT sectors, the Industrial sector performed best in Q3 2017 with a 7.7% total return, followed by Self-Storage at 4.6% and Hotels with 2.7%. The most disappointing traded REIT sector was Healthcare, with a negative 5.7% total return for the quarter. Office (-0.3%) and Multifamily (-0.2%) also had negative total returns for the quarter.
The time (at Blue Vault's 2nd Annual Broker Dealer Educational Summit) proved extremely informative.