In June, the MSCI US REIT Index (RMZ) produced a total return of -7.4%. The Chilton REIT Composite outperformed the benchmark for the month by producing a total return of -6.5% net of fees and -6.5% gross of fees. For the second quarter the Chilton REIT Composite has outperformed the RMZ by producing a total return of -14.2% net of fees and -14.0% gross of fees, which compares to the RMZ total return of -16.9%. Year to date, the Chilton REIT Composite has outperformed the RMZ by producing a total return of -17.6% net of fees and -17.3% gross of fees, which compares to the RMZ total return of -20.3%.
Positive contributors to relative performance included an underweight to the hotel sector, an underweight to the office sector, and an underweight to the regional mall sector. Conversely, an underweight to the triple net sector, an overweight to the diversified sector, and stock selection within the self storage sector detracted from relative performance.
Year to Date (YTD) Attribution
Year to date, positive contributors to relative performance included stock selection within the healthcare sector, an overweight allocation to the cell tower sector, and an overweight to the diversified sector. An underweight to the triple net sector, specialty sector, and hotel sector detracted from relative performance.
YTD Contributors Summary
YTD Detractors Summary
In the July 2022 REIT Outlook titled, “Equity REITs: Takeaways from NAREIT REIT Week,” we highlight our latest views on REITs after meeting with over 25 companies in New York for the first in-person NAREIT sponsored conference since November 2019. Across the board, leasing, occupancy, and rent growth are tracking at or above expectations, and the recent increase in interest rates has already slowed new construction, further tilting the supply and demand dynamics toward current landlords. Of course, REIT CEOs were aware of plunging stock prices, not just for them but also for their tenants. However, except for life science and technology companies, the recent pullback had not begun to affect leasing activity. As such, we came away from the conference with a positive outlook for REITs, understanding that price volatility may dominate the picture until interest rates stabilize and inflation is under control.
The information contained herein should be considered to be current only as of the date indicated, and we do not undertake any obligation to update the information contained herein in light of later circumstances or events. This publication may contain forward looking statements and projections that are based on the current beliefs and assumptions of Chilton Capital Management and on information currently available that we believe to be reasonable, however, such statements necessarily involve risks, uncertainties and assumptions, and prospective investors may not put undue reliance on any of these statements. This communication is provided for informational purposes only and does not constitute an offer or a solicitation to buy, hold, or sell an interest in any Chilton Capital Management investment or any other security.
Past performance is not indicative of future results. Investment returns and principal value will fluctuate so that an investors account, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted.
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