REIT Replay: Office REIT stocks plummet in recent week amid growing AI fears

The majority of US REIT indexes climbed during the week ended Feb. 13, outperforming the broader stock market.

The Dow Jones Equity All REIT index jumped 4.04% over the recent week, while the MSCI US REIT (RMZ) index increased 3.31%.

The broader stock market indexes logged weekly declines, with the S&P down 1.39% and the Dow Jones Industrial Average dropping 1.23%.

Nearly all REIT indexes closed the recent week in the black. The self-storage REIT index jumped 6.74%, followed by the healthcare REIT index, which rose 5.79%. The hotel and retail REIT indexes also increased 2.01% and 1.38%, respectively.

The top-five performing REIT stocks for the week were populated by data center, information storage and communications REITs. Data center REIT Fermi Inc. recorded the largest share-price increase, 28.63%, among all US REIT stocks with at least $200 million in market capitalization. Information storage-focused Iron Mountain Inc. ranked second with a share-price increase of 14.67%, followed by data center REIT Equinix Inc. at 12.74%.

Communication REITs American Tower Corp. and Crown Castle Inc. rounded out the top-five performing REIT stocks with increases of 12.16% and 11.75%, respectively.

While the other REIT indexes logged weekly increases, the office REIT index plummeted during the recent week amid growing fears that AI could lead to fewer white-collar jobs and thus less need for office space.

The Dow Jones US Real Estate Office index fell 6.72% during the week to 152.40, its lowest level since July 2009.

The four bottom-performing REIT stocks all came from the office sector. Hudson Pacific Properties Inc.'s share price plummeted 19.26% during the week, the largest share-price decline among all US REIT stocks with at least $200 million in market capitalization. Cousins Properties Inc. and Highwoods Properties Inc. ranked next with share-price declines of 12.40% and 11.11%, respectively, while Kilroy Realty Corp.'s share price dropped 9.29% over the week.