The 3 Best-Performing Office REITs Over The Past 4 Weeks

Real estate investment trusts (REITs) have suffered through a terrible year in 2022 as inflation pushed the Federal Reserve to raise interest rates a half dozen times.

Shares of most REITs fell 30% or more until mid-October when most of them touched 52-week lows and then bottomed. Since then, some have continued to languish, but the better stocks have come back strongly.

Investors should focus on the stocks showing the strongest relative strength in the various REIT subsectors. Take a look at the three of the best-performing office REITs over the past month (Note: Only REITs over $5 per share were considered):

Alexandria Real Estate Equities Inc. ARE is a Pasadena, California-based REIT with a portfolio of 74.5 million square feet that’s home to more than 1,000 tenants devoted to life science, agtech and technology companies — what its website calls “top innovation clusters.” Locations of its assets include cities such as Boston, New York, Seattle and San Francisco.

Boosting Alexandria Real Estate Equities’ performance over the past month was its third-quarter operating results. Revenue was up 20.5% over the same quarter in 2021, and funds from operations (FFO) came in at $2.13 per share, a 9% increase over the third quarter of 2021’s $1.95. Net income of $2.11 was well ahead of the $0.67 from the third quarter of 2021.

Alexandria Real Estate Equities has a current occupancy rate of 94.3%. It’s paying an annual dividend of $4.72, yielding 3.7%. Shares are up 8.89% over the past four weeks, making it the best-performing REITs in the office subsector.

Corporate Office Properties Trust OFC is a Columbia, Maryland-based REIT that specializes in purchasing, leasing and managing data center properties, mostly government offices in the Washington, D.C., area.

Corporate Office Properties Trust recently declared its 100th consecutive quarterly dividend payment, which is $0.275 per share. The annual dividend of $1.10 per share presently yields 4%.

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Third-quarter operating results showed improvement over the same quarter of 2021:

• Diluted earnings per share (EPS) came in at $0.27 compared to $0.24 for the third quarter a year ago.
• Diluted funds from operations per share (FFOPS) was $0.58 for the third quarter of 2022, besting $0.56 in the third quarter of 2021.

• The Core portfolio is now 93% occupied and 95% leased.

Shares of Corporate Office Properties Trust are up 8.27% over the past month, the second-highest gain among office REITs.

Cousins Properties Inc. CUZ is an Atlanta-based office REIT founded in 1958. It invests in Class A office towers located in high-growth markets of the Sun Belt. The locations of its portfolio are shown on the map:

Cousins Properties’ third-quarter earnings were similar to its third quarter of the previous year. FFO of $0.69 was identical to the $0.69 figure in the third quarter of 2021. Revenue of $193.46 million was 4.3% above the $185.52 million achieved in the third quarter last year.

Over the last four quarters, the company has surpassed consensus FFO estimates twice. The current annual dividend of $1.28 yields 5.1%.

Shares are up 6.39% over the past four weeks, making it the third-best performer of the office REIT sub-category.

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