The 3 Best-Performing Residential REITs Over The Past 4 Weeks
Residential real estate investment trusts (REITs) were subpar performers in 2022, but like many other REITs, they are beginning to find their footing in 2023, as the entire residential subsector has shown recent positive gains.
These three residential REITs have performed the best among the entire residential subsector within the past four weeks:
NexPoint Residential Trust Inc. (NYSE: NXRT) is a Dallas-based residential REIT that acquires, owns and operates middle-income multifamily properties in larger areas, primarily across the Southeast and Southwest U.S. NexPoint Residential Trust has a portfolio of 41 properties with 15,387 units across 10 Sun Belt markets.
NexPoint Residential Trust raised its quarterly dividend from $0.38 to $0.42 per share in December, and its annual dividend of $1.68 per share now yields 3.4% on a recent closing price of $48.58. NexPoint has raised its dividend by 68% over the past five years.
On Dec. 1, NexPoint Residential Trust announced that it had refinanced 18 loan agreements and was working on one additional loan for $807.6 million, or 47.7% of its total outstanding debt. These refinances are expected to save NexPoint Residential Trust secured overnight financing rate (SOFR) + 155 basis points. It will use approximately $245 million from the refinances to pay down the outstanding principal of its corporate credit facility.
This week, NexPoint Residential Trust announced the completed sale of a 260-unit property in Houston, owned since 1997, in which net proceeds were $20.6 million. NexPoint also revealed it will sell one additional Houston property by the second quarter of 2023 that is expected to bring in between $62 million and $64 million net.
Over the past four weeks, NexPoint Residential Trust leads all residential REITs with a gain of 11.22%.
Centerspace (NYSE: CSR) is a Minot, North Dakota-based residential REIT with a focus on the ownership, management, acquisition and redevelopment of apartment buildings. Its portfolio covers 83 apartment complexes in Colorado, Minnesota, Montana, Nebraska, North Dakota and South Dakota.
Despite its relatively small size compared to many other residential REITs, Centerspace has performed quite well since its initial public offering (IPO) in 1997. During that time, it has a total return of 1,125.28%.
Centerspace pays a quarterly dividend of $0.73 per share, and its $2.92 annual dividend per share yields 4.4% on a recent closing price of $65.41. Its payout ratio on forward funds from operations (FFO) of $4.40 is a comfortable 66.3%.
Although 2022 was a terrible year for Centerspace, losing 43.11%, over the past four weeks, the REIT is the second-leading residential REIT with a substantial bounce back of 11.03%.
American Homes 4 Rent Class A (NYSE: AMH) is a residential REIT focused on purchasing, developing, renovating and leasing single-family homes as rental properties. American Homes 4 Rent began in 2012, and in only 11 years has built a portfolio of over 60,000 single-family units across 21 states. Its IPO was in July 2013. Its third-quarter occupancy rate was 97.1%.
American Homes 4 Rent pays a quarterly dividend of $0.18 per share, and its annual dividend of $0.72 per share yields 2.1% on its recent closing price of $33.28.
In recent news, American Homes 4 Rent announced it will release fourth-quarter and full-year 2022 operating results on Feb. 23 after the market closes. Also this week, Scotia Capital initiated coverage for American Homes 4 Rent with an Outperform rating.
Shares of American Homes 4 Rent were down 28.55% in 2022, as rising interest rates and a real estate slowdown were strong headwinds. But over the past four weeks, American Homes 4 Rent has risen 9.22% — the third-highest gain among all residential REITs.
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