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US REIT share-price rally takes hiatus in Q4'19, returns largely flat

The share-price rally for U.S. equity real estate investment trusts took a hiatus in the fourth quarter of 2019 following three consecutive quarters of positive returns. The SNL U.S. REIT Equity index finished the quarter flat, while the S&P 500, on the other hand, generated a 9.1% return.

Looking at 2019 as a whole, the SNL U.S. REIT Equity index ended the year with a 28.5% total return, an overall strong performance just short of the S&P 500's 31.5% return for the year.

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By property sector, office REITs showed the strongest performance in the recent quarter, with the SNL U.S. REIT Office index holding a 6.3% total return. The industrial and hotel sector indexes followed with returns of 5.2% and 4.4%, respectively.

On the other side of the coin, the self-storage index held a negative 9.9% return for the quarter, the worst performance of any property sector index. Public Storage, the largest self-storage REIT by market capitalization and comprising roughly 58.1% of the self-storage index's total weight, ended the quarter with a negative 12.3% return, while Extra Space Storage Inc. and CubeSmart, the next-largest self-storage REITs, followed with returns of negative 8.8% and negative 9.8%, respectively. Life Storage Inc. and National Storage Affiliates Trust, meanwhile, generated positive returns for shareholders of 3.7% and 1.8%, respectively.

The healthcare sector index followed, at negative 5.9%.

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Ground lease-oriented Safehold Inc.'s share price soared during the quarter, ending with a return of 32.8%, the highest return of any U.S. equity REIT in the quarter. Shopping center REIT Kite Realty Group Trust followed, with a return of 23.0%.

Multifamily-focused BRT Apartments Corp. rounded out the top three, with a return of 17.9%. BRT's share price spiked shortly after its third-quarter earnings release, where it reported an 8.3% increase in rental revenues and same-store NOI growth of 11.3%.

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On the other hand, mall REIT Taubman Centers Inc.'s stock price steadily declined during the quarter, ending with a total return of negative 22.1%, the lowest return of any U.S. equity REIT.

Ventas Inc., a healthcare-focused REIT, followed next, ending the quarter with a negative 19.9% return. Ventas' share price dove after reporting shaky results in its seniors housing operating portfolio for the third quarter.

Colony Capital Inc. followed, with a return of negative 19.2% for the quarter.

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