April results underperformed the benchmark due to stock selection in the data center/tech sector, an overweight allocation to shopping centers, as well as an underweight allocation to lodging REITs. Contributors to relative performance included stock selection in the self storage sector, as well as underweight allocations to the healthcare and single tenant sectors.
REIT earnings season is underway, and so far, fundamentals have remained positive across the sector despite the sector continuing to trade at a discount to NAV. M&A has remained a trending topic as DCT Industrial Trust (NYSE: DCT) announced an agreement to be acquired by Prologis (NYSE: PLD) on April 29, 2018. This is in addition to other recent M&A activity and chatter over the past few months (WFD, GGP, LHO). We believe M&A will continue to be a catalyst to close the gap between public and private valuations as long as the NAV discounts persist.
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