NAV REITs Outshine Traded REITs in Q2 2024 Performance

In Q2 2024, NAV REITs outperformed traded REITs with a 0.3% gain and a five-year annualized return of 7.9%, while several significant sponsor actions were noted.

July 31, 2024

The Stanger NAV REIT Total Return Index recorded a slight 0.3% gain in Q2 2024, marking its second consecutive positive quarter and fourth in the last five quarters. Over the past five years, NAV REITs have achieved an impressive annualized return of 7.9%, significantly outperforming traded REITs.

The Stanger Lifecycle REIT Index also improved, gaining 0.4% in Q2 2024 after a negative return earlier this year.

“Despite the comparatively robust performance of publicly traded REITs over the past 12 months, the Stanger NAV REIT Index continues to outperform publicly traded indices over a five-year period. Its impressive 7.9% annualized return is more than double that of the top-performing traded REIT index for the same timeframe,” said Kevin T. Gannon, CEO and chairman of Robert A. Stanger & Co., Inc.

The second quarter of 2024 saw significant actions from several sponsors. KKR launched a shareholder priority plan to set a future NAV per share floor, Ares concluded public offerings and started perpetual private offerings for its Real Estate Income Trust and Industrial Real Estate Income Trust, and Starwood reduced the capacity of its share repurchase program.

J.P. Morgan Real Estate Income Trust led the three-month return rankings with a 3.2% quarterly return. FS Credit Real Estate Income Trust, focused on mortgages, held the top spot in the one-year total return rankings for the second consecutive quarter. Ares Industrial REIT moved ahead of Cottonwood Communities in the three-year rankings, while Blackstone Real Estate Income Trust continued to lead the five-year return category.

For lifecycle REITs, Highlands REIT was the best performer over 12 months, and SmartStop Self Storage REIT led the three-year return rankings. Lightstone Value Plus REIT V, specializing in multifamily properties, remained the top performer in five-year total returns.

No new public non-traded REITs were registered in Q2 2024. Sila Realty Trust, a lifecycle REIT, began trading on the NYSE in June 2024.