In September 2023, the MSCI US REIT Index (RMZ) produced a total return of -6.8%. The Chilton REIT Composite outperformed the benchmark for the month by producing a total return of -6.4% both gross and net of fees. For the third quarter, the Chilton REIT Composite has underperformed the RMZ by producing a return of -7.3% gross of fees and -7.4% net of fees, which compares to the RMZ’s total return of -7.0%. Year to date, the Chilton REIT Composite has outperformed the RMZ by producing a total return of +0.9% gross of fees and +0.5% net of fees, which compares to the RMZ’s total return of -1.9%.
Positive contributors to relative performance for the month of September included stock selection within the residential and healthcare sectors, and an underweight to the triple net sector. Conversely, an underweight to the lodging sector, an overweight to the cell tower sector, and an underweight to the regional malls sector 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, and an underweight to the specialty and lodging sectors detracted from relative performance.
YTD Contributors Summary
YTD Detractors Summary
In the October 2023 REIT Outlook titled, “Senior Housing REITs: The Cure for Rising Rates,” we discuss the strong fundamentals in Senior Housing (SH) today and why we think the property type’s growth outlook is well positioned for a ‘higher for longer’ rate environment. Not only are SH fundamentals rebounding out of the pandemic, but over the medium term, record growth in the 80+ year old population presents an exceptional demand backdrop for the sector. Additionally, rising construction and financing costs are keeping a lid on new development. We believe this combination of rapid demand growth and minimal new supply should sustain well above average dividend growth over the coming years.
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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