In the first quarter, the Chilton REIT Composite has outperformed the RMZ by producing a total return of +3.9% gross of fees and +3.7% net of fees, which compares to the RMZ’s total return of +1.1%.  Additionally, the Chilton REIT Composite outperformed the Vanguard Real Estate Index (VNQ), our secondary benchmark, that produced a total return of +2.7%.  See the table on page 2 for historical numbers.

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March Attribution

Positive contributors to relative performance for the month of March included overweight allocations to the cell tower and healthcare sectors, and an underweight allocation to the regional mall sector. Conversely, an underweight allocation to the triple net and self-storage sectors, and an overweight allocation to the data center sector detracted from relative performance.

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Quarterly Attribution

Positive contributors to relative performance for the first quarter of 2025 included an overweight allocation to the cell tower sector, and underweight allocations to the lodging and specialty sectors.  Conversely, an underweight allocation to the triple net sector, stock selection within the industrial sector, and an overweight allocation to the data center sector detracted from relative performance.

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2025 Contributors Summary

• An overweight allocation to the cell tower sector contributed to relative performance.  Given the long lease terms typical in cell towers, the group has been negatively impacted by rising rates in recent years.  However, given the specter of falling rates, coupled with an attractive valuation, we have witnessed material outperformance in cell towers thus far for 2025.

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• An underweight allocation to the lodging sector also contributed to relative performance.  In particular, fears around waning consumer health have weighed on the lodging REITs in 2025 and contributed to Composite relative performance.

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• An underweight allocation to the specialty sector contributed to relative performance.  Most notably, Iron Mountain (NYSE: IRM) has underperformed in 2025 due to its data center division, benefitting Composite relative performance.

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2025 Detractors Summary

• An underweight allocation to the triple net sector detracted from the Composite’s relative performance.  Given the long lease terms typical in triple net, the group has benefited from the specter of falling rates this year.  

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• Stock selection within the industrial sector also detracted from relative performance.  In particular, we have an overweight to cold storage through Americold (NYSE: COLD), which has underperformed due to continued pressure on food volumes and weighed on Composite relative performance.

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• An overweight allocation in the data center sector also detracted from relative performance.  Notably, DeepSeek-R1 released a paper in January touting artificial intelligence leaps at a fraction of the cost.  This has weighed on data center REITs given the potential for reduced space needs for AI advancements.  Looking past this near-term headwind, we think the reduction in AI costs drive more investment over the long term.

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Market Commentary

The Ten Commandments of REIT Investing | February 2025

Demographic Trends Shaping REIT Portfolio Construction | March 2025

Turning Up the Heat on BREIT | April 2025

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Additional Disclosures

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 and Vanguard Real Estate ETF 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.

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.