Average short interest in US REITs ticks up in March

Average short interest in US equity real estate investment trusts grew 14 basis points in March to 3.5% of shares outstanding, according to S&P Global Market Intelligence data.

Datacenter REITs notch largest short interest gain

As of March 28, the datacenter sector posted the biggest hike in short interest on average, with a 43-basis-point increase from the prior month to 2.7% of shares outstanding.

Among datacenter REITs, short interest in Equinix Inc. grew more than 1 percentage point in March to 2.2% of its shares outstanding. Short interest in Digital Realty Trust Inc. fell 18 basis points during the month to 3.2% of shares outstanding.

The advertising sector ranked next in terms of average short interest gain during the month, up 35 basis points to 2.6% of shares outstanding.

At the end of March, short interest in Outfront Media Inc. grew to 3.2% of shares outstanding, and that of Lamar Advertising Co. grew to 2% of shares outstanding. Both are advertising REITS.

The office sector remained the most shorted REIT property sector. During March, short interest in the sector rose 31 basis points to 5.9% of shares outstanding on average.

Within the office sector, Office Properties Income Trust's short interest was up 2.5 percentage points to 15.9% of shares outstanding, the second-largest increase of all US REITs during the month. Short interest as a percentage of shares outstanding for Douglas Emmett Inc. also rose 2 percentage points to 12.3% as of March 28, the third-largest increase of all US REITs.

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By contrast, short interest for communications REITs fell 14 basis points in March to 3.1% of shares outstanding.

Within the communications sector, short interest in SBA Communications Corp. dropped the furthest, down 58 basis points during the month to 2.5% of shares outstanding. Uniti Group Inc.'s short interest as a percentage of shares outstanding fell 21 basis points to 7.9%. Short interest in American Tower Corp. remained flat and increased in Crown Castle Inc., though short interest in both REITs stood at 1.1% of shares outstanding as of March 28.

Average short interest in farmland REITs dropped 14 basis points to 3.9% of shares outstanding at the end of March. Farmland Partners Inc.'s short interest as a percentage of shares outstanding fell 32 basis points to 6.2%, while short interest in Gladstone Land Corp. was up 4 basis points to 1.6% of its shares outstanding.

REITs with the most change in short interest

Industrial REIT Rexford Industrial Realty Inc. recorded the largest increase in short interest as a percentage of its shares outstanding in March, up 5.2 percentage points to 7% of shares outstanding at month-end.

Office Properties Income placed second with an increase of 2.5 percentage points and Douglas Emmett placed third with an increase of 2 percentage points. Both are office REITs.

Two healthcare REITs rounded out the five largest increases in short interest for the month. Short interest in Medical Properties Trust Inc. increased 1.8 percentage points during the month to 34.5% of its shares outstanding, while short interest in CareTrust REIT Inc. climbed 1.7 percentage points to 3.4% of its shares outstanding.

Conversely, industrial REIT Terreno Realty Corp. experienced the largest decrease in short interest in March, down 1.8 percentage points to 1.7% of its shares outstanding.

Three hotel REITs followed next. Short interest in RLJ Lodging Trust fell 1.6 percentage points to 5.1% of its shares outstanding as of March 28, while Sunstone Hotel Investors Inc. registered a decline in short interest of 1.5 percentage points and DiamondRock Hospitality Co. registered a decline of 1.2 percentage points.

REITs with largest short positions

Healthcare REIT Medical Properties Trust was again the most shorted REIT stock as of March 28, with more than 206.6 million shares sold short, or about 34.5% of its shares outstanding.

Office REIT SL Green Realty Corp. ranked second, with short interest of 13.7 million shares as of March-end, or 21.1% of its shares outstanding.