REIT short interest relatively flat in January

Short interest in US equity real estate investment trusts remained largely unchanged in January, up by only 1 basis point from the month prior, according to S&P Global Market Intelligence data.

Casino sector sees largest hike in short interest

The casino sector logged the biggest gain in average short interest across all property types, rising 53 basis points from the previous month to 1.9% of shares outstanding as of Jan. 31.

This recent increase was mainly due to the significant hike in VICI Properties Inc.'s short interest, up 1.2 percentage points to 2.3% of the casino REIT's shares outstanding, the eighth-largest gain among all US REITs in January.

By contrast, casino REIT Gaming & Leisure Properties Inc.'s short interest saw a 16-basis-point decline to 1.4% of its shares outstanding at month-end.

The healthcare segment had the second-largest hike in average short interest by January-end, up 37 basis points to 4.1% of shares outstanding. It was followed by the hotel sector, with a 23-basis-point increase to 5.5% of shares outstanding.

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On the other hand, the office segment lost the most short interest on average across all property types, declining 29 basis points over the preceding month to 5.3% of shares outstanding as of January-end.

Office REIT Douglas Emmett Inc. posted the largest drop in short interest in the sector, as well as in the entire REIT industry, with a 2.9-percentage-point decline to 10.5% of its outstanding shares. Three other office REITs on the list of the 10 REITs with the biggest short interest losses as of January-end were Peakstone Realty Trust, Hudson Pacific Properties Inc. and Paramount Group Inc.

Advertising REITs reported the second-largest declines with a 28-basis-point drop in average short interest to 2.1% of shares outstanding as of Jan. 31.

REITs with largest short positions

Healthcare-focused Medical Properties Trust Inc. had the largest increase in short interest among all US REITs in January, increasing 8.5 percentage points from the prior month. This increase propelled the healthcare REIT to the most shorted US REIT stock with 205.0 million shares sold short as of Jan. 31, or 34.3% of its shares outstanding.

Office REIT SL Green Realty Corp. was the second-most shorted US REIT stock at 20.8% of its shares outstanding, followed by single tenant-focused NETSTREIT Corp. and office landlord Hudson Pacific Properties, with short interests of 19.5% and 15.9% of shares outstanding, respectively.