In October, the MSCI US REIT Index (RMZ) produced a total return of 4.9%. The Chilton REIT Composite underperformed the benchmark for the month by producing a total return of 1.1% gross of fees and 0.9% net of fees. Year to date, the Chilton REIT Composite has underperformed the RMZ by producing a total return of -25.6% gross of fees and -26.1% net of fees, which compares to the RMZ total return of -24.8%.
Positive contributors to relative performance included an overweight to the diversified, shopping center and data center sectors. Conversely, an overweight to the cell tower sector, an overweight to the residential sector, and an underweight to the regional mall sector detracted from relative performance.
Year to Date (YTD) Attribution
Year to date, positive contributors to relative performance included an underweight to the data center sector, an overweight to the shopping center sector, and an underweight to the office sector. Conversely, an underweight allocation to the triple net sector, an overweight to the cell tower sector, and an underweight to the lodging sector detracted from relative performance.
YTD Contributors Summary
YTD Detractors Summary
In the November 2022 REIT Outlook titled, “Shopping Center REITs: Supply/Demand Too Good To Ignore,” we highlight how the pandemic has proved out the benefit of retailers offering customers multiple channels and the indispensability of brick and mortar retail. As we look to navigate clearly formed macro clouds on the horizon, we believe four key points set up Shopping Center REITs for above average performance: 1) lack of new supply going back to the GFC, 2) weaker retail tenants getting shaken out in 2020, 3) under expansion in brick and mortar space leaving many retailers competing for the same boxes, and 4) well positioned balance sheets allowing REITs to navigate and capitalize on any dislocations.
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 investor’s 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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