AEW Capital Management trims share count in majority of REIT holdings in Q1

The total market value of AEW Capital Management LP's real estate investment trust portfolio fell 25.3% to roughly $2.05 billion in the first quarter. During the quarter, AEW trimmed its share count in the majority of its holdings as share prices across the REIT sector dipped, according to the company's latest Form 13F filing.

Exits

AEW sold its stake in office REITs Cousins Properties Inc. and COPT Defense Properties during the first quarter, which were valued at roughly $42.5 million and $17.9 million the quarter prior, respectively.

The firm also sold out of its position in single-tenant retail REIT NETSTREIT Corp. and Canada-headquartered residential REIT Tricon Residential Inc.

Subsidiaries of Blackstone Inc. agreed to acquire Tricon Residential on Jan. 19, with the deal closing after quarter-end May 1.

Additionally, Physicians Realty Trust completed its merger with Healthpeak Properties Inc. on March 1. As of the end of 2023, AEW held 42,790 shares in Physicians Realty Trust, valued at approximately $569,535 on Dec. 31, 2023.

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Position decreases

In addition to the exits, AEW trimmed its share count in 34 other REIT holdings during the first quarter.

The firm sold nearly all of its shares of single-tenant retail REIT Agree Realty Corp., retaining just 1,400 shares as of quarter-end valued at roughly $79,968.

AEW sold more than 90% of its stake in office REIT Alexandria Real Estate Equities Inc., 84.9% of its stake in healthcare REIT Ventas Inc. and 82.2% of its share count in industrial REIT EastGroup Properties Inc.

Other REITs in which AEW dropped more than half of its stake included multifamily REIT Essex Property Trust Inc. and single-family REIT Invitation Homes Inc.

New additions

AEW added four new positions to its REIT portfolio in the first quarter. Office REIT Boston Properties Inc. marked the largest new addition to the firm's investment portfolio, valued at $34.8 million as of March 31. AEW had sold its stake in Boston Properties in the third quarter of 2023.

Office REIT Kilroy Realty Corp. followed next, valued at $31.5 million at quarter-end. The other two additions were healthcare REIT CareTrust REIT Inc., valued at $12.7 million, and multifamily REIT Independence Realty Trust Inc., worth approximately $706,171.

Position increases

AEW increased its share count in eight of its existing REIT positions during the first quarter.

The firm upped its stake in multifamily REIT Apartment Income REIT Corp. by more than sevenfold, making it AEW's 25th-largest holding as of March 31, valued at $29.3 million.

AEW tripled its share count in single-tenant retail REIT Realty Income Corp., valued at $78.1 million as of quarter-end, the firm's eighth-largest holding.

AEW doubled its stakes in cold-storage-oriented Americold Realty Trust Inc. and healthcare REIT Healthpeak Properties Inc.

Other REITs in which AEW increased its share count during the quarter included multifamily REIT Camden Property Trust, healthcare REIT Welltower Inc., ground lease-oriented Safehold Inc. and shopping center REIT Brixmor Property Group Inc.

Top holdings

Industrial REIT Prologis Inc. remained the firm's largest holding by market value as of March 31, at $254.2 million.

Datacenter REIT Equinix Inc. and Welltower followed as the second- and third-largest holdings, valued at $192.0 million and $120.6 million, respectively.

By property sector, AEW held the highest exposure to residential REITs, totaling $469.3 million in aggregate. The specialty sector — consisting of casino, communications and datacenter REITs — followed next at $421.5 million in aggregate.