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Equity REITs fell 0.15% in the week ahead of the Christmas festive season, while mortgage REITs gained 2.13% of value.
Hotel REITs were major laggards among the subsectors, having lost 4.38% of their value in the week ending Dec. 23. The consensus is negative on the sector, according to a research report by Baird Equity. In the Insights from Investor Sentiment Survey by the organization, 65% of respondents identified the sector as Underweight. For 2023, 80% of investors expect Hotel REIT stocks to underperform.
Industrial REITs were comparatively better off this week, having finished 0.97% higher.
Office REITs were the biggest losers YTD, having lost 39.84% of their value. The year 2022 is shaping up to be their second-worst year on record for REITs, a Dec. 19 report by Morningstar said, citing Morgan Stanley’s REIT outlook.
Meanwhile, the broader Real Estate Select Sector SPDR ETF lost 1.12% on a weekly basis, while S&P 500 was down 0.19%.
REITs had a tough year, but they are also likely to have more pain in 2023, according to Morgan Stanley’s REIT outlook.