In July 2023, the MSCI US REIT Index (RMZ) produced a total return of +2.9%. 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 outperformed the RMZ by producing a total return of +10.1% gross of fees and +9.6% net of fees, which compares to the RMZ total return of +8.5%.
Positive contributors to relative performance for the month of July an underweight to the triple net sector, stock selection within the data center sector, and an underweight to the self storage sector. Conversely, an overweight to the cell tower sector, and an underweight to the office and regional mall sectors detracted from relative performance.
Year to Date (YTD) Attribution
Year to date, positive contributors to relative performance included an underweight to the triple net and office sectors, and stock selection within the industrial sector. An overweight to the cell tower sector, an underweight to the specialty sector, and stock selection within the shopping center sector detracted from relative performance.
YTD Contributors Summary
YTD Detractors Summary
In the August 2023 REIT Outlook titled, “Self-Storage REITs: A Cautious Outlook for a COVID Winner,” we discuss the current state of the self-storage sector, recent acquisitions that have made headlines, and how we are currently positioned. Following the record-level demand in 2021 and 2022, a return to normalcy seems evident thus far into 2023. While the concern of dampening demand can be mitigated given reasonable supply levels, stickier customers, and shifts in revenue maximization strategies, the tailwinds are matched with additional headwinds amidst an increasing interest rate environment. In summary, we have a cautious view of self-storage given the risks to current and future operations, weighed against historically-attractive valuation metrics on a relative basis.
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 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. MSCI US REIT Index performance is presented as a benchmark for reference only and does not imply any portfolio will achieve similar returns, volatility or any characteristics similar to any actual portfolio. The composition of a benchmark index may not reflect the manner in which any is constructed in relation to expected or achieved returns, investment holdings, sectors, correlations, concentrations or tracking error targets, all of which are subject to change over time.
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