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REIT Replay: Markets, REITs extend losses

Real estate investment trusts and the broader markets continued to lose ground Wednesday, Feb. 21, as the newly released minutes from the Federal Reserve's latest meeting indicated bullish sentiment among policymakers.

QTS Realty Trust Inc. disclosed a restructuring plan focused on hyperscale and hybrid colocation, which the data center-focused REIT said are the two primary drivers of demand in its business.

QTS Realty shares plunged 22.70% to close at $34.01.

Self-storage REIT Extra Space Storage Inc.'s 2017 funds from operations per share attributable to common stockholders and unit holders rose year over year to $1.17 from $1.00.

Extra Space Storage shares rose 0.93% to end the day at $81.50.

Public Storage booked a decline in its 2017 fourth-quarter FFO per share allocable to common shares to $2.70 from $2.77 a year earlier. The self-storage REIT also appointed President Joe Russell as its new CEO and Tom Boyle as its new CFO.

Shares of Public Storage added 2.38%, closing at $190.75.

Lodging REIT LaSalle Hotel Properties said it might lower its annual dividend to its minimum REIT distribution requirement of approximately 80 cents to 90 cents per common share from its current rate of $1.80 per common share, if its 2018 base case outlook plays out.

LaSalle Hotel shares closed 10.19% lower at $25.37.

Boenning & Scattergood analyst Floris van Dijkum downgraded hotel REIT Park Hotels & Resorts Inc. to "neutral," saying the company's shares have underperformed the hotel sector year-to-date after a "solid run" in 2017. The analyst also noted that Chinese conglomerate HNA could potentially sell its roughly 25% shareholding in Park Hotels via private placements, adding that the overhang around HNA's ownership has weighed on investors.

In the same note, van Dijkum upgraded lodging REIT Sunstone Hotel Investors Inc. to "outperform," saying the company's disciplined approach of owning relevant real estate and prudently allocating capital should push its stock to outperform its peers despite year-to-date underperformance.

Park Hotels shares declined 1.85% to $26.06, and Sunstone shares fell 2.55% to close at $14.88.

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Earnings call coverage

'Animal spirits,' high tenant demand bolster self-storage REITs, execs say: Even amid the ongoing threat of competition from new properties, there are reasons for storage owners to be optimistic about the near future, the CEOs of Public Storage and Extra Space Storage said in earnings conference calls.

American Campus expects to compete for other University of California projects: The University of California System is looking to the private-public partnership model to finance student housing projects statewide, and the company expects to compete for other contracts outside the recently awarded one in Riverside.

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