As the first half of 2023 comes to a close, it's been a challenging time for stocks and real estate investment trusts (REITs). With Federal Reserve rate hikes and hints of a looming recession, more than half of all REITs have experienced negative total returns. However, amidst the turmoil, there are some REITs that have managed to thrive, demonstrating their resilience and potential for future success. Let's take a closer look at the best-performing REITs of the first half of 2023.
Angel Oak Mortgage REIT Inc. - Turning the Tide
One of the standout performers is Angel Oak Mortgage REIT Inc. (NYSE:AOMR). Despite a challenging 2022, where it experienced a negative total return of 61.9%, Angel Oak Mortgage has managed to turn things around in 2023. With a total return of 64.35%, it leads all REITs in performance. This remarkable success can be attributed to improved earnings and analyst confidence. Despite missing estimates in the first two quarters of 2023, analysts are optimistic about a rebound in mortgage REITs, which has contributed to Angel Oak's impressive performance.
Arlington Asset Investment Corp. - Riding the Merger Wave
Another top performer is Arlington Asset Investment Corp. (NYSE:AAIC). This McLean, Virginia-based mortgage REIT focuses on investing in mortgage-related assets and residential real estate. Its total return of 53.2% in 2023 places it among the best-performing REITs. Arlington Asset Investment received a significant boost when it agreed to a merger with Ellington Financial Inc. (NYSE:EFC). This announcement caused its shares to soar, and the company has continued to climb since then.
Life Storage Inc. - Defying Acquisition Offers
Life Storage Inc. (NYSE:LSI), a self-storage REIT based in Buffalo, New York, has also managed to perform exceptionally well in the first half of 2023. Despite turning down an offer to be acquired by Public Storage (NYSE:PSA), Life Storage agreed to a superior offer from Extra Space Storage Inc. (NYSE:EXR) in early April. This strategic decision demonstrates the company's confidence in its own potential and has contributed to its total return of 38.75%.
EPR Properties - Overcoming the Odds
Kansas City, Missouri-based EPR Properties (NYSE:EPR) is a diversified experiential REIT that owns and operates various recreational venues across the United States. Despite concerns about the risk of default among its movie theater chains, EPR Properties has proven the skeptics wrong. With a total return of 29.32% in 2023, it has exceeded expectations. Positive earnings results and upgrades from prominent analysts have provided the much-needed boost for this remarkable performance.
Tanger Factory Outlet Centers Inc. - Embracing Growth
Tanger Factory Outlet Centers Inc. (NYSE:SKT), a retail REIT based in Greensboro, North Carolina, has seen impressive growth in 2023. In April, Tanger Factory Outlet Centers raised its quarterly dividend and reported earnings that beat estimates. With a total return of 243.07%, it stands out among the best-performing REITs of the year so far.
Welltower Inc. - Navigating the Healthcare Sector
Welltower Inc. (NYSE:WELL), a healthcare REIT, has also delivered solid performance in 2023. Despite a downgrade from one analyst, Welltower announced an increase in its 2023 Normalized FFO guidance. This positive update, combined with its strong presence in the healthcare sector, has contributed to a total return of 21.1%.
Plymouth Industrial REIT Inc. - Outshining the Competition
Boston-based Plymouth Industrial REIT Inc. (NYSE:PLYM) has emerged as a top performer among industrial REITs. With exceptional occupancy and rent collection rates, as well as positive developments such as dividend hikes and beating earnings estimates, Plymouth Industrial has achieved a total return of 21.03% in the first half of 2023.
These successful REITs serve as examples of the opportunities that exist within the market. However, it's important for investors to stay informed and make thoughtful decisions. Understanding the complexities of REITs can be a challenge, which is why reliable research is crucial. Benzinga's Weekly REIT Report offers valuable insights into the real estate market, providing investors with the tools they need to spot incredible opportunities. Don't miss out on the chance to capitalize on these valuable resources.
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