Average short interest in US REITs edges up in February

Average short interest across U.S. equity real estate investment trusts ticked up 3 basis points in February to 3.2% of shares outstanding, according to S&P Global Market Intelligence data.

Advertising, industrial sectors see biggest drop

The advertising segment had the largest decline in average short interest across all property types, posting a decline of 1.2 percentage points from the previous month to 3.0% of shares outstanding as of Feb. 28.

This drop can mostly be attributed to the fall in OUTFRONT Media Inc.'s short interest, which fell 2.1 percentage points in February, the second-largest decline across all U.S. REITs. Lamar Advertising Co. saw a decline in short interest of roughly 27 basis points to 2.1% of shares outstanding.

The industrial sector had the next-biggest drop, logging a decrease of 42 basis points in average short interest to 2.7% of shares outstanding as of February-end.

Beating Outfront Media was industrial REIT LXP Industrial Trust, which had the steepest slide in short interest across all U.S. REITs at 2.4 percentage points, to 2.4% of its shares outstanding.

Innovative Industrial Properties Inc. was included in the list of 10 REITs with the biggest short-interest decline for February, recording a decline of 80 basis points to 9.8% of its shares outstanding.

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By contrast, the datacenter segment saw average short interest climb 43 basis points to 3.0% of shares outstanding, the biggest increase across all property types. The "other retail" sector, which includes outlet center, single-tenant and other retail REITs, followed with a rise of 37 basis points to 4.1% of outstanding shares.

Top REITs by change in short interest

Single tenant-focused Essential Properties Realty Trust Inc. had the biggest jump in short interest in February, posting an increase of 4.2 percentage points to 6.1% of its shares outstanding. Another single tenant retail REIT, Four Corners Property Trust, followed with short interest up 2.6 percentage points to 5.2% of its shares outstanding.

Behind LXP Industrial and Outfront Media, office REIT Empire State Realty Trust Inc. had the third-largest drop in short interest, down 1.0 percentage point to 7.2% of its outstanding shares.

REITs with largest short positions

Healthcare-focused Medical Properties Trust Inc. continued to be the most-shorted U.S. REIT stock, with 110.6 million shares sold short as of Feb. 28, or 18.5% of its shares outstanding. Office REIT SL Green Realty Corp. and hotel-focused Pebblebrook Hotel Trust followed, with short interests of 15.4% and 12.5% of shares outstanding, respectively.