Much like the rest of the real estate market, real estate investment trusts (REITs) have their ups and downs. They are a popular way to get into the business without having to deal directly with property. Right now, many investors are trying to figure out which REITs to sell.
Lately, Many REITs are beginning to feel the effects of the rising interest rates in the U.S. One of the things that affects them is rising borrowing costs. In addition, higher interest rates give them direct competition with other investment options. Finally, higher interest rates also complicate REITs’ refinancing and debt maturities.
In this article, I will analyze three REITs to sell to protect your portfolio and avoid potential losses.
Sabra Healthcare (SBRA)
Let’s start with Sabra Healthcare (NASDAQ:SBRA), a real estate investment firm specializing in healthcare properties. Although it has had steady growth in the past, it has recently faced some financial challenges. Last quarter, it reported an adjusted loss of 4 cents per share. In addition, its revenues declined 1.1% compared to the previous year.
These negative financial results have led to a drop in the value of Sabra Healthcare’s stock. Analysts have a neutral outlook on the company’s future performance. If you have Sabra Healthcare shares in your portfolio, it might be a good time to consider selling them to avoid potential REIT losses.
Digital Realty (DLR)
Digital Realty Trust (NYSE:DLR) is engaged in the ownership and management of data centers and other digital infrastructure properties. While it has had steady growth in the past, it has also faced some challenges recently.
Last quarter, it reported adjusted earnings of 19 cents per share, slightly below analysts’ expectations. These mixed financial results have led to a decline in the value of Digital Realty stock. If you have investments in this REIT, it might be prudent to consider selling them and protect your portfolio.
Veris Residential (VRE)
Lastly, we have Veris Residential (NYSE:VRE), a company that focuses on the residential real estate sector. Especially the ownership and management of multifamily properties. Last quarter, Veris reported a net loss of 27 cents per share. However, they also reported a 15.8% increase in their net operating income for the same period.
Although Veris Residential has faced some challenges, its overall performance indicates greater profitability and stability compared to the other REITs mentioned above. If you have investments in Veris Residential, it may be prudent to consider holding them in your portfolio for now. But, be wary of a sell-off of VRE stock.
As of this writing, Gabriel Osorio-Mazzilli did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
