The Real Deal New York

Real estate firms bloodied in stock market tumble

REITs among worst-hit on volatile day of trading

August 25, 2015 08:00AM
By Rey Mashayekhi

The New York Stock Exchange and Marc Holliday and Steven Roth (inset)

The New York Stock Exchange in the Financial District (inset, from left: Marc Holliday and Steven Roth)

UPDATED, 1:00 p.m., Aug. 25: From commercial brokerages to real estate investment trusts, it was hard to find a publicly-traded real estate firm that didn’t take a beating on one of the most volatile days in the stock market’s history.

As markets in China and Europe plunged early Monday morning, so too did prices in New York when trading opened — with the Dow Jones Industrial Average falling 1,000 points shortly after 9 a.m. before gradually making up ground over the course of the day. The Dow still ended the day down 3.6 percent while the Standard & Poor’s 500 dropped 3.9 percent, and real estate stocks followed suit — with the MSCI US REIT Index, which measures national REIT performance, falling 4.7 percent on the day.

The city’s major REITs were not exempt from that decline, with SL Green Realty’s stock falling 5.7 percent to close at $105.25 per share and Vornado Realty Trust slipping 5.1 percent to $87.43. Boston Properties saw its share price drop 5.3 percent to close at $112.33 per share, while residential REITs like AvalonBay ($165.55 per share, -4.6 percent) and Equity Residential ($70.55, -5.2 percent) experienced declines of their own.

Among other REITs, Acadia Realty Trust ($29.89, -5.4 percent), Empire State Realty Trust ($16.41, -5.6 percent) and New York REIT ($9.53, – 5.3 percent) all saw share prices take a tumble, while non-REIT status didn’t offer a reprieve to Brookfield Property Partners ($20.51, -4.1 percent) and Forest City Enterprises ($21.40, -3.2 percent).

Commercial brokerages, meanwhile, were among the hardest hit — with Monday’s volatility compounding losses already felt this month. CBRE Group’s share price experienced a 6.9 percent drop to close at $32.51 per share, while JLL slipped 8.2 percent to $149.28 per share. HFF fell 3.4 percent to $36.60 at close, while Marcus & Millichap dropped 6.9 percent to $42.71 per share.

And major residential firms didn’t have it much easier. Realogy, parent company of the Corcoran Group and Sotheby’s International Realty, saw its stock dip 3.3 percent Monday to $40.55 at close. Shares for Howard Lorber’s Vector Group dropped 3.4 percent to close at $23.22, while Toll Brothers’ stock fell the steepest of the three — 4.7 percent — to $38.06 per share.

How these stock values — and the global economy at large — fare through the rest of the week remains to be seen.