NAV Monitor: US REITs close October at 28.4% median discount to net asset value

This Data Dispatch is updated monthly and was last published Oct. 3. The analysis includes US equity real estate investment trusts that trade on the Nasdaq, NYSE or NYSE American with market capitalizations of at least $200 million. You can download these charts in Excel format.

Publicly traded US equity real estate investment trusts traded at a 28.4% median discount to their consensus net asset value per-share estimates as of October-end, a steeper discount compared to the median of 24.4% at Sept. 29, according to an S&P Global Market Intelligence analysis.

Largest discounts

The office sector continued to trade at the largest median discount to net asset value (NAV), at 45.7%. The regional mall sector traded at the second-largest median discount at 35.2%, followed by the hotel sector at 34.1%.

Among public US REITs with market capitalizations of at least $200 million, office REIT Office Properties Income Trust traded at the largest discount to NAV. The REIT closed Oct. 31 at $4.49 per share, 84.0% below its consensus NAV estimate of $28.03 per share.

Hudson Pacific Properties Inc. took the second spot, trading at a discount of 72.9%, and Piedmont Office Realty Trust Inc. took third spot, trading at a discount of 67.9%, among the 10 REITs on the largest discount list.

Other office REITs on the largest discount list were Brandywine Realty Trust, Peakstone Realty Trust and Highwoods Properties Inc. Brandywine closed the Oct. 31 trading session at a discount of 65.6%, Peakstone closed at a discount of 57.1% and Highwoods closed at a discount of 54.1%.

Two multifamily REITs, namely NexPoint Residential Trust Inc. and BRT Apartments Corp., were also on the list. NexPoint traded at a discount of 57.9% and BRT traded at a discount of 57.5%.

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Largest premiums

The data center sector was the sole property sector to close October at a median premium to NAV, at 3.4%.

Within the data center sector, Digital Realty Trust Inc. closed the month at $124.36 per share, 4.1% above its consensus NAV estimate of $119.48 per share. Equinix Inc. ended October at a 2.7% premium to NAV.

Healthcare REITs took the top three spots on the largest premium list as of Oct. 31.

Welltower Inc. ranked No. 1 among the 10 REITs on the largest premium list, ending the month at $83.61 per share, a 40.2% premium to its consensus NAV estimate. CareTrust REIT Inc. placed second, trading at a premium of 25.1%, and Omega Healthcare Investors Inc. placed third, trading at a premium of 24.9%.

Other healthcare REITs on the largest premium list were LTC Properties Inc., which traded at a premium of 8.3%; National Health Investors Inc., which traded at a premium of 4.5%; and Sabra Health Care REIT Inc., which traded at a premium of 3.5%.

The other two REITs on the list were data storage-focused Iron Mountain Inc. and shopping center REIT Phillips Edison & Co. Inc.