US REITs log dip in short interest in September

Short interest in US equity real estate investment trusts ticked down on average during September.

Average REIT short interest fell 8 basis points during the month to 3.7% of shares outstanding, according to S&P Global Market Intelligence data.

'Other retail' REITs log largest decline in short interest

The "other retail" sector, which includes single-tenant retail and outlet center REITs, recorded the largest drop in average short interest in September, down 79 basis points to 4.9% of shares outstanding.

Single-tenant retail-focused Netstreit Corp. posted the biggest decline in short interest as a percentage of shares outstanding of any US REIT during the month, down 5.4 percentage points to 7.3%. Netstreit closed the month as the 18th most-shorted US REIT versus being the seventh most-shorted REIT at the end of August.

Getty Realty Corp. and Agree Realty Corp. were also among the REITs with the largest declines in short interest relative to their shares outstanding for September. Short interest in Getty Realty fell 2.8 percentage points to 4.1% of its shares outstanding, while short interest in Agree Realty dropped 1.5 percentage points to 8.8% of shares outstanding.

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The hotel sector followed, with a 60-basis-point drop in average short interest as a percentage of shares outstanding. Hotels closed the third quarter as the third-most-shorted REIT property sector, trailing the healthcare and office sectors.

Within the hotel sector, short interest in Sunstone Hotel Investors Inc. as a percentage of shares outstanding fall 2.3 percentage points to 5.2%, while RLJ Lodging Trust recorded a 1.7-percentage-point decline in short interest to 7.0% of shares outstanding.

The office sector remained the most-shorted REIT property sector, at 5.3% of shares outstanding on average.

The advertising REIT sector booked the biggest increase in average short interest as a percentage of shares outstanding, up 1.4 percentage points to 4.0% of shares outstanding.

Advertising REIT OUTFRONT Media Inc. registered the third-largest increase in short interest, up 2.9 percentage points to 5.9% of its shares outstanding.

REITs with the most change in short interest

Among all US REITs, shopping center-focused Wheeler Real Estate Investment Trust Inc. logged the largest increase in short interest in September, up 16 percentage points to 32.4% of shares outstanding.

Multifamily REIT Independence Realty Trust Inc. ranked second with a 4.4-percentage-point increase in short interest to 10.0% of shares outstanding.

Conversely, Netstreit posted the largest decline in short interest, followed by multifamily REIT Centerspace, which logged a 4.3-percentage-point decline in short interest to 0.9% of its shares outstanding.

The third-biggest decline was logged by healthcare REIT Medical Properties Trust Inc., with short interest down 3.6 percentage points to 35.9% of shares outstanding.

REITs with the largest short positions

Medical Properties Trust remained the most-shorted US REIT stock, with 215.2 million shares sold short.

Wheeler REIT ranked second, with 202,282 shares sold short.

Office REIT Hudson Pacific Properties Inc. rounded out the top three, with short interest equal to 16.4% of shares outstanding.