Real Estate Stocks Tumble Amid Geopolitical Tensions and Rising Bond Yields
Wall Street ended the week lower as U.S.-Iran tensions stayed elevated, with officials warning the conflict could drag on, while Treasury yields climbed to multi-month highs.
The Iran war has led to volatility in the U.S. government bond yields and interest rate expectations, according to a report by S&P Global Market Intelligence.
The U.S. 10-year Treasury yield closed the week at 4.44%, its highest close since July 17, 2025.
"The bar for hikes is quite high, especially now that we're seeing some slowing of growth," Oksana Aronov, head of market strategy for alternative fixed income at JPMorgan Asset Management, told CNBC in an interview.
Real estate stocks, generally impacted by the aforementioned two factors, dipped this week.
The S&P 500 Real Estate Index Sector fell 0.73% to 255.19 points, while the accompanying State Street Real Estate Select Sector SPDR ETF was down 1.43% to $40.01.
The Dow Jones REIT Indx Equity REIT Total Return Index declined 0.76%, while the FTSE Nareit All Equity REITs index retreated 0.80%.
Among largecap stocks, CoStar Group led the weekly losers. The stock retreated 7.30% to close the week at $39.77.
CoStar has seen a downtrend since its investor, D. E. Shaw, criticized the real estate services provider over reduced financial transparency resulting from a recent change in reporting structure.
Gaming and Leisure Properties was the next on the list. The stock fell 4.58% to $43.93 amid a report that gaming wins on the Las Vegas Strip rose 0.9% in February to $696.3M on a year-over-year comparison.
Telecom tower REITs Crown Castle and American Tower followed, retreating 4.58% and 4.11% to close the week at $78.59 and $169.52, respectively.
Wells Fargo lowered its recommendation on CCI stock and reduced the price target, citing concerns over the company's organic growth. The growth lags competitors, making it difficult to justify a premium valuation.
On the flip side, Weyerhaeuser led the gainers. This week, DA Davidson reiterated its Buy rating on the stock, citing that the shares are increasingly attractive given the company's significant timberland ownership and supply-side driven momentum in lumber prices.
For the midcap stocks, Rithm Capital was the top gainer. The mortgage REIT declared a quarterly dividend of $0.25 per share, in line with previous.
Rayonier, Corporación Inmobiliaria Vesta, and Blackstone Mortgage Trust were the next on the list.
Fermi was the biggest decliner in the category. The stock was trading lower, near post-IPO lows, ahead of its quarterly financial results due to be released on Monday. FQ4 loss per share is estimated to narrow quarter-over-quarter to -$0.02.
Separately, the company announced it secured a $165M senior secured, first lien, delayed draw term loan from CSG Investments.
Brandywine Realty Trust and AH REALTY TRUST led the smallcap losers. BDN touched its 52-week low this week.
IRSA Inversiones y Representaciones and Claros Mortgage Trust were the notable gainers.
