NAV Monitor: US REITs close March at 15% median discount to net asset value

This Data Dispatch is updated monthly and was last published March 6. 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 listed US equity real estate investment trusts finished March at a 15% median discount to their consensus net asset value per share estimates, in line with the month prior, according to S&P Global Market Intelligence data.

Largest discounts

The office sector closed the month at the largest median discount to net asset value (NAV) among all REIT sectors, at 28.2%, followed by diversified REITs at a median discount of 22%.

The farmland and hotel sectors followed next, with median discounts of 21.2% and 19.6%, respectively. The communications sector closed at a median discount of 17%.

Industrial Logistics Properties Trust continued to trade at the largest discount to NAV among all REITs above $200 million market capitalization. The industrial REIT closed March 28 at $4.29 per share, 67.6% below its consensus NAV estimate of $13.26 per share.

Four office REITs were also among the top 10 REITs trading at the largest discounts to NAV. Hudson Pacific Properties Inc. finished the month in the second spot, closing March 28 at $6.45 per share, 54% below its consensus NAV estimate of $14.02 per share. City Office REIT Inc. followed closely behind in the third spot, closing the month at a 51.6% discount to its consensus NAV estimate. The two other office REITs in the top 10 were Piedmont Office Realty Trust Inc. in the fifth spot and Brandywine Realty Trust in the seventh spot, trading at discounts of 50.4% and 47%, respectively.

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Largest premiums

Datacenter REITs were the sole REIT property sector to close at a median premium to NAV as of March-end, at 10.3%. Within the datacenter sector, Digital Realty Trust Inc. ended the month at a 16.2% premium to its consensus NAV estimate, while Equinix Inc. closed the month at a premium of 4.3%.

Among all equity REITs above $200 million market cap, two healthcare REITs — Welltower Inc. and CareTrust REIT Inc. — ended the month at the largest premiums to NAV. Welltower closed March 28 at $93.44 per share, up 57% compared to its consensus NAV estimate of $59.52 per share. CareTrust REIT ended the month at $24.37 per share, 39.7% above its consensus NAV estimate of $17.45 per share.

Data storage-oriented Iron Mountain Inc. ranked in the third spot, closing March at a 36.2% premium to its consensus NAV estimate, while healthcare REITs National Health Investors Inc. and Omega Healthcare Investors Inc. rounded out the top five with premiums of 27.5% and 26.8%, respectively.