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REIT Replay: REIT prices dip during week ended Jan. 4; broader markets log gains

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REIT Replay: REIT prices dip during week ended Jan. 4; broader markets log gains

Share prices for U.S. equity real estate investment trusts dipped during the week ended Jan. 4, while the broader markets began to bounce back from their late-December tumble. The SNL U.S. REIT Equity index closed the week down 0.25%, while the S&P 500 increased 1.86% over the week and the Dow Jones Industrial Average was up 1.61%.

Despite the share price decline in the overall U.S. REIT market, the hotel and office sectors each experienced positive price gains during the week. The SNL U.S. REIT Hotel index increased 1.66%, while the office sector index ticked up 0.13%.

The self-storage and multifamily sectors experienced the largest drops in share price, on a market-cap-weighted basis, during the week, down 2.67% and 1.89%, respectively.

Of U.S. REITs with market caps of more than $200 million, healthcare REIT MedEquities Realty Trust Inc.'s share price rose the most. It jumped 44.44% on the first trading day of 2019 following the announcement of its definitive merger agreement with Omega Healthcare Investors Inc. Under the deal terms, MedEquities stockholders will receive 0.235 of an Omega common share and $2.00 in cash for each share held.

The calculated offer price of $10.26 per share represented a 50.0% premium to MedEquities' Dec. 31, 2018, share price. MedEquities was the most actively traded REIT stock during the past week and ended the week up 46.23% at $10.09 per share.

Hotel-focused Ashford Hospitality Trust Inc., communications REIT Uniti Group Inc. and multifamily-focused Bluerock Residential Growth REIT Inc. each also logged double-digit increases in share price.

Diversified REIT Safety Income & Growth Inc.'s share price fell 7.09% during the week, the largest drop among the group. Hotel-focused Hersha Hospitality Trust and self-storage REIT National Storage Affiliates Trust followed, logging share price declines of 5.86% and 3.54%, respectively.

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