Winners and Losers in REITs' Q3 Results

NEW YORK CITY—REIT earnings season for the third quarter is just about at the halfway mark, with such sector leaders as Equity Residential, Prologis, SL Green Realty Corp., AvalonBay Communities and Ventas Inc. all reporting strong results. That small sampling of more than 175 publicly traded companies is both a summary of what we can expect from this earnings season and not representative of the whole, according to a Jefferies and Co. report.

Although the Q3 announcements coming out between Oct. 15 and Nov. 10 should yield results primarily in line with analysts’ expectations, “there will be more positive and negative outliers,” writes Jefferies equity analyst Omotayo Okusanya. On the negative side, according to Okusanya, “we have rising supply issues in certain property types (senior housing, select service hotels) and a weaker tourist market due to a strong dollar impacting hotels and malls in key tourist markets. On the positive side, we continue to see strong fundamentals in storage, apartments, data centers and CBD office.”