US REIT average short interest barely up in June

Short interest in US equity real estate investment trusts was up slightly in June, rising 4 basis points on average from the previous month to 3.6% of shares outstanding, according to S&P Global Market Intelligence data.

Industrial sector posts largest gain in short interest

The industrial sector gained the most short interest on average across all property types, with a 37-basis-point hike from the prior month to 2.4% of shares outstanding as of June 28.

Within the industrial segment, Terreno Realty Corp. had the largest rise in short interest, up 1.5 percentage points to 4.1% of its shares outstanding, making it the seventh-biggest gainer across the entire REIT industry in June.

Another industrial REIT, Plymouth Industrial REIT Inc., logged a significant hike, up 1.3 percentage points during the same period to 3.0% of its shares outstanding.

Most of the other industrial REITs also booked gains in short interest in June. The exceptions were Americold Realty Trust Inc., which posted a decline of 37 basis points to 0.9% of its shares outstanding, and First Industrial Realty Trust Inc., with short interest nearly flat at 1.4% of shares outstanding.

The second-biggest increase in average short interest was in the diversified sector, which logged a 27-basis-point hike to 2.6% of shares outstanding on average.

Diversified REITs Clipper Realty Inc. and EPR Properties posted steep gains in short interest as a percentage of shares outstanding, at 1.6 percentage points each. Both were among the biggest gainers across the entire industry at month-end.

Two other diversified REITs, Peakstone Realty Trust and Safehold Inc., were included on the list, logging short interest hikes of 1.4 and 1.3 percentage points, respectively.

The healthcare segment had the third-highest increase in average short interest, with a 17-basis-point hike to 4.3% of shares outstanding.

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Conversely, the hotel sector registered the largest drop in average short interest across all property types, declining 33 basis points from the previous month to 5.2% of shares outstanding as of June 28.

The self-storage segment was next with a 30-basis-point drop in average short interest to 2.5% of shares outstanding. It was followed by the office sector, which posted a decrease of 17 basis points to 6.1% of shares outstanding on average.

REITs with the most change in short interest

Office-focused Net Lease Office Properties logged the largest increase in short interest in June, with a 3.4-percentage-point hike to 9.7% of shares outstanding. Single tenant REITs Agree Realty Corp. and Essential Properties Realty Trust Inc. followed, with short interest gains of 3.3 and 2.1 percentage points, respectively.

Single tenant REIT NETSTREIT Corp. had the biggest drop in short interest in June, down 5.4 percentage points to 13.0% of outstanding shares.

REITs with largest short positions

Although Medical Properties Trust Inc. lost short interest in June, the healthcare REIT remained the most-shorted US REIT stock, with 195.6 million shares sold short, or 32.6% of shares outstanding.

Office REIT SL Green Realty Corp. was the second most-shorted US REIT stock with 19.7% of its shares outstanding sold short, followed by another office REIT, Office Properties Income Trust, at 15.7% of shares outstanding.