The carnage in the real estate investment trust sector continues as new names hit new 52-week lows. The effect of rising interest rates is hitting the group hard and it’s not clear when the Fed might “pivot” to lower rates – late 2023, early 2024? In the meantime, these rate-sensitive REITs are not attracting buyers the way they used to.
Ashford Hospitality Trust Inc AHT is a hotel real estate investment trust with headquarters in Dallas, Texas. The company’s assets include 99 hotels with 22,116 rooms in 27 states. Funds from operations this year increased by 96.30% and the past 5-year growth rate is 33.50%. Ashford Hospitality does not pay a dividend. Average daily volume is relatively light (for a New York Stock Exchange traded security) at 414,000 shares.
Sunstone Hotel Investors Inc SHO, based in Irvine, California, owns and manages 15 hotels with 7,735 rooms and a total meeting space of 665,000 square feet.
Sunstone’s properties include Wailea Beach Resort, Four Seasons Napa Valley, Hilton San Diego Bayfront and a number of others. The REIT trades with a price-earnings ratio of 10 and at just above book value. This year’s funds from operations are up by 103.20%. The past 5-year record is -35.10%. Sunstone pays a 2.12% dividend.
Xenia Hotels & Resorts Inc XHR is headquartered in Orlando, Florida, and invests in luxury and upscale properties. The company owns 32 hotels with 9,508 rooms in 14 states. The properties include the Fairmont in Dallas, Texas, Grand Bohemian Hotel in Charleston, South Carolina, the Ritz Carlton in Denver and other similar types of hotels. Funds from operations increased this year by 68.95%. The past 5-year FFO track record is not as good, coming in at -29.20%. Xenia pays a 3.08% dividend.
These 3 REITs join a host of publicly traded real estate investment trusts that are heading down with only occasional relief rallies that end up being sold. As long as rates rise, it’s possible this is what we may continue to see in the new year.
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