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US REITs swing to NAV premium in Q1

Editor's note: For comparisonreasons, all figures in this article represent data calculated for publicly tradedU.S. equity REITs with at least three NAV-per-share estimates and pricing data asof Dec. 31, 2015, and March 31, 2016. Click here to view these charts in Excel format.

Publiclytraded U.S. equity REITs posted a weighted average premium to NAV of 2.3% as ofMarch 31. The sector saw a roughly 5.7-percentage-point increase from the end of2015, when REITs traded at a weighted average discount of 3.4%. The increase stemsfrom a year-to-date 5.2% increase in the weighted average price during the firstquarter of 2016, while REITs saw an approximately 0.7% weighted average decreasein consensus NAV estimates.

traded at thelargest discount to NAV as of March 31, at 44.4%, while Realty Income Corp. traded at the largest premium to NAV,at 41.6%.

The officesector traded at the largest weighted average discount to NAV as of March 31, at13.4%. The sector's weighted average price slipped 2.0% during the quarter — theonly sector that saw a price decrease. The office sector also saw a decrease inits weighted NAV, dropping 1.7% year-to-date.

At theend of the first quarter, First PotomacRealty Trust traded at the largest discount to NAV in the office sector,at 32.2%, while Highwoods PropertiesInc. was the sole company in the sector that traded at a premium toNAV, at 1.1%.

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Continuingthe trend from 2015, the self-storage sector traded at the largest weighted averagepremium to NAV, at 39.4%. During the first quarter, the self-storage sector sawa weighted average increase in price of 10.2%, while also seeing an increase inits weighted average NAV estimate by 3.4%. As of March 31, all publicly traded U.S.self-storage REITs with at least three NAV estimates traded at a premium to NAV,with Public Storage tradingat the largest premium, at 40.7%, and SovranSelf Storage Inc. trading at the lowest premium, at 20.8%.

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DiversifiedREIT Gramercy Property Trust Inc.saw the greatest improvement in its discount to NAV estimate year-to-date, witha 45.6-percentage-point shrinkage. During the first quarter, Gramercy saw a 9.5%increase in its price, while its consensus NAV estimate fell by 43.2%. As of March31, Gramercy traded at a discount to NAV of 5.3%, while it traded at a 50.9% discountto NAV at the end of 2015.

FirstPotomac Realty Trust saw a 17.8-percentage-point increase in its discount to NAVestimate during the first quarter, the largest drop among all U.S. equity REITs.First Potomac saw a 0.4% increase in its consensus NAV estimate, while its pricefell by 20.5%. As of March 31, First Potomac traded at a 32.2% discount to NAV,while the company traded at a 14.4% discount at the end of 2015.

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For additional country and sector NAV dissection, try SNL's Global NAV Analysis Excel template, as well as other real estate templates that can be found in the template library.