These Were The Best Performing REITs Last Month

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Real estate investment trusts (REITs) demonstrated notable relative strength in March, with about 70% of all REITs gaining ground for the month. The Vanguard Real Estate Index Fund ETF VNQ, which includes REITs as well as other real estate-related stocks, was up 1.94%. But many REITs were notably stronger than that.

Quite often the best performers are not necessarily the largest or most well-known REITs, and this was apparent over the last four weeks. Take a look at the best-performing REITs in March. 

Acres Commercial Realty Corp. ACR is a Uniondale, New York-based mortgage REIT (mREIT) with a specialty of originating, holding and managing mortgage loans and other debt instruments for commercial real estate (CRE). Multifamily properties account for 80% of its lending portfolio. Acres Commercial is externally managed by ACRES Capital LLC, a subsidiary of ACRES Capital Corp.

Acres Commercial has $2.2 billion in assets. Its most recent percentage of current loan portfolio payments is 98%.

 On Feb. 28, Acres Commercial reported fourth-quarter earnings per share (EPS) of $0.55, beating the estimate of $0.47 handily. Revenue of $22.45 million was also ahead of the estimate of $19.6 million, although it was slightly below fourth-quarter 2022 revenue of $23.24 million.

Strong earnings in the fourth quarter propelled Acres Commercial to lead all REITs in March with a total gain of 27.24%.

NewLake Capital Partners Inc. NLCP is a New Canaan, Connecticut-based internally managed industrial REIT with 31 properties totaling 1.7 million square feet across 12 states. NewLake Capital Partners specializes in triple-net leases to cannabis companies as well as providing capital to them when necessary. Its market cap is $369.06 million.

NewLake was founded in 2019 and had its initial public offering (IPO) in August 2021. Its tenants include the largest companies in the cannabis industry, such as Curaleaf, Cresco Labs Inc. and Trulieve. As of March, it had a 100% occupancy rate, with an average of 14.3 years remaining on its lease terms and 2.6% annual rent escalations on 15-20 year lease terms.

On March 11, NewLake delivered upbeat fourth-quarter 2023 operating results. Funds from operations (FFO) of $0.51 per share beat the estimates of $0.45 per share. Revenue of $13.02 million beat the estimates of $11.41 million and its fourth-quarter 2022 revenue of $12.18 million by 6.89%.

Analysts are beginning to take notice of NewLake. On March 14, Compass Point analyst Merrill Ross upgraded NewLake from Neutral to Buy and announced an $18.25 price target.  

NewLake had the second-highest total gain among all REITs in March with 20.87% 

Creative Media & Community Trust Corp. CMCT is a Dallas-based office REIT that focuses on acquiring, operating and developing premier office, hotel and multifamily residential properties in fast growing communities. Many of its 13 properties are in Texas and California. Creative Media & Community is externally managed by CIM Group. 

Creative Media was established in 1994 and owns 403 real estate assets worth $30.7 billion. 

On March 27, Creative Media reported its fourth-quarter operating results. FFO of $(0.72) per share, missed the estimate of $(0.48) by 50% and was 84.62% below fourth-quarter 2022 FFO of $(0.39) per share. Revenue of $29.47 million missed the estimate of $30.2 million but was a 13.92% increase over revenue of $25.87 million in the fourth quarter of 2022. 

Despite the poor results, Creative Media managed to secure a total gain of 18.33%, the third highest among all REITs.

Outfront Media Inc. OUT is a New York-based specialized REIT with 500,000 advertising displays across the largest U.S. markets. It uses billboard, digital, transit and mobile assets to showcase its clients. Outfront Media's website claims that its media reaches 70% of all Americans on a weekly basis. Outfront ahd Lamar Advertising Co. LAMR are the only specialty REITs that exclusively own advertising space. 

On Feb. 21, Outfront Media reported its fourth-quarter operating results. Adjusted funds from operations (AFFO) of $0.40 beat the estimate of $0.36 and revenue of $501.2 million beat the estimate of $495.89 million and topped fourth-quarter 2022 revenue of $494.7 million. 

Another positive for Outfront Media was the announcement on March 19 that it will be expanding its programmatic capabilities in transit advertising across the New York City subway stations and commuter rail stations- with a potential to reach over four million daily rider trips.

Outfront's total gain of 18.93% was the fourth best among REITs in March.

Peakstone Realty Trust PKST is an El Segundo, California-based, internally managed diversified REIT that owns and operates single-tenant office and industrial properties. Peakstone calls itself "America's Blue-Chip Landlord" and has a portfolio of 71 properties with 17.9 million square feet of space across 24 states in high-growth markets. Its portfolio is 96% leased. Peakstone had its IPO on April 13, 2023.

On Feb. 22, Peakstone Realty reported its fourth-quarter operating results. Adjusted FFO of $0.80 beat the estimates of $0.64 and revenue of $63.1 million was ahead of estimates of $63.06 million. 

Since its IPO in April 2023 at $8, Peakstone has been one of the most volatile REITs, with large gains and losses. In March, Peakstone, buoyed by its strong fourth-quarter earnings, had a total gain of 18.77%, fifth best among all REITs. 

Other REITs that performed well in March with gains between 13% and 17% include Geo Group Inc. GEO, SL Green Realty Corp. SLG and City Office REIT Inc. CIO.

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