Real estate stocks plunge as rate cut hopes go topsy-turvy

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phakphum patjangkata

Real estate stocks tumbled despite strong quarterly results as the U.S. Federal Reserve rate cut odds went on a wild journey since Wednesday.

The Fed kept its benchmark policy rate [https://seekingalpha.com/news/4474633-federal-reserve-holds-rates-again-but-two-voters-dissent] at 4.25%-4.50%, as widely expected, on Wednesday. Chair Jerome Powell signaled that policymakers were in no hurry to cut [https://seekingalpha.com/news/4474645-overall-effects-of-tariffs-on-prices-still-to-be-seen-fed-chair-powell-says] interest rates.

Chances [https://seekingalpha.com/news/4476725-fed-rate-cut-odds-go-on-a-roller-coaster-ride-after-powell-pce-and-jobs-data] of a September rate cut plunged below 50% after Powell's hawkish remarks, and then fell below 40% on Thursday after a stubborn inflation report. But Friday's jobs data has caused a significant reversal, sending the odds back above 80%.

The S&P 500 Real Estate Index Sector (SP500-60) was down 3.47% from the prior week to 259.22, while the accompanying Real Estate Select Sector SPDR Fund ETF (NYSEARCA:XLRE [https://seekingalpha.com/symbol/XLRE]) declined 3.51% to 41.29.

Dow Jones REIT Indx Equity REIT Total Return Index (NASDAQ:REIT:IND [https://seekingalpha.com/symbol/REIT:IND]) fell 3.55% on a weekly basis to 2,608.98, while FTSE NAREIT Equity REITS retreated 3.57% to 753.55.

Meanwhile, the earnings season continued on a positive note for the real estate companies. Here is a look at the week's major earnings releases:

* Camden Property Trust [https://seekingalpha.com/news/4475949-camden-property-trust-ffo-of-1_67-misses-by-0_01-revenue-of-396_51m-beats-by-2_76m] (CPT [https://seekingalpha.com/symbol/CPT]) - FFO miss, revenue beat
* Kimco Realty [https://seekingalpha.com/news/4475363-kimco-realty-ffo-of-0_44-beats-by-0_01-revenue-of-525_18m-in-line] (KIM [https://seekingalpha.com/symbol/KIM]) - FFO beat, revenue in-line
* Equinix [https://seekingalpha.com/news/4474775-equinix-ffo-of-9_91-beats-by-2_92-revenue-of-2_26b-in-line] (EQIX [https://seekingalpha.com/symbol/EQIX]) - FFO beat, revenue in-line
* UDR [https://seekingalpha.com/news/4474883-udr-ffo-of-0_61-misses-by-0_01-revenue-of-425_4m-beats-by-3_23m] (UDR [https://seekingalpha.com/symbol/UDR]) - FFO miss, revenue beat
* VICI Properties [https://seekingalpha.com/news/4474820-vici-properties-ffo-of-0_60-misses-by-0_05-revenue-of-1b-beats-by-8_1m] (VICI [https://seekingalpha.com/symbol/VICI]) - FFO miss, revenue beat
* Invitation Homes [https://seekingalpha.com/news/4474862-invitation-homes-ffo-of-0_48-in-line-revenue-of-681m-beats-by-5_41m] (INVH [https://seekingalpha.com/symbol/INVH]) - FFO in-line, revenue beat
* Host Hotels & Resorts [https://seekingalpha.com/news/4474855-host-hotels-resorts-ffo-of-058-beats-by-006-revenue-of-159b-beats-by-80m] (HST [https://seekingalpha.com/symbol/HST]) - FFO beat, revenue beat
* Extra Space Storage [https://seekingalpha.com/news/4474826-extra-space-storage-ffo-of-1_98-misses-by-0_07-revenue-of-841_62m] (EXR [https://seekingalpha.com/symbol/EXR]) - FFO miss
* AvalonBay Communities [https://seekingalpha.com/news/4474817-avalonbay-communities-ffo-of-2_82-beats-by-0_01] (AVB [https://seekingalpha.com/symbol/AVB]) - FFO beat
* Mid-America Apartment Communities [https://seekingalpha.com/news/4474798-mid-america-apartment-communities-ffo-of-2_19-beats-by-0_05-revenue-of-549_9m-misses-by-1_47m] (MAA [https://seekingalpha.com/symbol/MAA]) - FFO beat, revenue miss
* Public Storage [https://seekingalpha.com/news/4474783-public-storage-ffo-of-4_28-beats-by-0_05-revenue-of-945_19m-misses-by-254_81m] (PSA [https://seekingalpha.com/symbol/PSA]) - FFO beat, revenue miss
* Regency Centers [https://seekingalpha.com/news/4473796-regency-centers-ffo-of-1_10-misses-by-0_02] (REG [https://seekingalpha.com/symbol/REG]) - FFO beat
* American Tower [https://seekingalpha.com/news/4473191-american-tower-ffo-of-2_60-beats-by-0_12-revenue-of-2_63b-beats-by-40m] (AMT [https://seekingalpha.com/symbol/AMT]) - FFO beat, revenue beat
* Omega Healthcare Investors [https://seekingalpha.com/news/4475944-omega-healthcare-investors-ffo-of-0_77-beats-by-0_03-revenue-of-282_51m-beats-by-39_22m] (OHI [https://seekingalpha.com/symbol/OHI]) - FFO beat, revenue beat
* Healthcare Realty [https://seekingalpha.com/news/4475942-healthcare-realty-ffo-of-0_41-beats-by-0_02-revenue-of-297_5m-beats-by-4_28m] (HR [https://seekingalpha.com/symbol/HR]) - FFO beat, revenue beat
* Agree Realty [https://seekingalpha.com/news/4475917-agree-realty-ffo-of-1_05-in-line-revenue-of-175_53m-beats-by-2_46m] (ADC [https://seekingalpha.com/symbol/ADC]) - FFO in-line, revenue beat
* Medical Properties Trust [https://seekingalpha.com/news/4475463-medical-properties-trust-nffo-of-014-beats-by-001-revenue-of-24036m-beats-by-846m] (MPW [https://seekingalpha.com/symbol/MPW]) - FFO beat, revenue beat
* CTO Realty Growth [https://seekingalpha.com/news/4473830-cto-realty-growth-ffo-of-0_45-misses-by-0_01-revenue-of-37_64m-beats-by-1_18m] (CTO [https://seekingalpha.com/symbol/CTO]) - FFO miss, revenue beat
* Industrial Logistics Properties [https://seekingalpha.com/news/4473818-industrial-logistics-properties-ffo-of-0_21-beats-by-0_01-revenue-of-112m-beats-by-0_38m] (ILPT [https://seekingalpha.com/symbol/ILPT]) - FFO beat, revenue beat
* W. P. Carey [https://seekingalpha.com/news/4473776-w-p-carey-ffo-of-1_28-beats-by-0_07-revenue-of-430_78m-beats-by-14_52m] (WPC [https://seekingalpha.com/symbol/WPC]) - FFO beat, revenue beat

OTHER NOTABLE NEWS

* Opendoor Technologies (OPEN [https://seekingalpha.com/symbol/OPEN]) received [https://seekingalpha.com/news/4476868-opendoor-regains-compliance-with-nasdaq-requirements-and-cancels-special-meeting-of-stockholders] a written notice from Nasdaq about having regained compliance with the stock exchange's minimum bid price requirement. The stock has benefitted from a recent meme stock rally and postponed [https://seekingalpha.com/news/4472807-opendoor-delays-shareholder-vote-on-reverse-stock-split-after-recent-rally] a planned reverse stock split vote.
* STAG Industrial (STAG [https://seekingalpha.com/symbol/STAG]) promoted [https://seekingalpha.com/news/4475948-stag-industrial-announces-coo-appointment] Steven Kimball to the post of COO, effective August 1.
* Orion Properties' (ONL [https://seekingalpha.com/symbol/ONL]) board concluded [https://seekingalpha.com/news/4472678-orion-properties-board-rejects-kawa-capitals-revised-proposal] that Kawa Capital Management's revised $2.75-per-share cash proposal to acquire the office REIT isn't in the best interest of its shareholders.

WINNERS & LOSERS

Essex Property Trust (ESS [https://seekingalpha.com/symbol/ESS]) stood out as the biggest weekly loser among the S&P 500 real estate stocks, having declined 10.57% to close at $256.72.

The multi-family residential REIT reported [https://seekingalpha.com/pr/20181819-essex-announces-second-quarter-2025-results-and-raises-full-year-2025-guidance] higher FFO per share for the three months ended June 30, but lower earnings for the six-month period.

BXP (BXP [https://seekingalpha.com/symbol/BXP]) was the second-biggest loser, retreating 10.00% to finish the week at $64.62.

The office REIT posted [https://seekingalpha.com/news/4473932-bxp-ffo-of-1_71-beats-by-0_04-revenue-of-868_46m-beats-by-12_55m] a Q2 beat and raised 2025 FFO guidance. However, CFO Michael LaBelle stated during the earnings call [https://seekingalpha.com/article/4806305-bxp-inc-bxp-q2-2025-earnings-call-transcript] that ~$0.01 per share of expenses is expected to be reflected in full-year results.

The two stocks drove the S&P 500 Office REITs subsector and the S&P 500 Residential REITs subsector to the top weekly losers position among the S&P 500 REIT subsectors.

The week's outliers were CBRE (CBRE [https://seekingalpha.com/symbol/CBRE]) (+4.32% W/W), Welltower (WELL [https://seekingalpha.com/symbol/WELL]) (+2.90% W/W), CoStar Group (CSGP [https://seekingalpha.com/symbol/CSGP]) (+1.75% W/W), and Ventas (VTR [https://seekingalpha.com/symbol/VTR]) (+1.56% W/W).

Welltower [https://seekingalpha.com/news/4472926-welltower-boosts-normalized-ffo-guide-after-q2-results-beat], Ventas [https://seekingalpha.com/news/4474880-ventas-q2-results-top-consensus-nudges-up-low-end-of-ffo-guidance], and CBRE [https://seekingalpha.com/news/4473189-cbre-beats-top-line-and-bottom-line-estimates-raises-fy25-outlook] raised their full-year financial performance outlooks after solid second-quarter results, while Welltower increased its dividend payout [https://seekingalpha.com/news/4473426-welltower-raises-dividend-by-104-to-074] as well.

Meanwhile, CoStar filed [https://seekingalpha.com/news/4474220-costar-sues-zillow-alleging-rampant-copyright-infringement] a lawsuit against Zillow (Z [https://seekingalpha.com/symbol/Z]) (ZG [https://seekingalpha.com/symbol/ZG]) in one of the largest image infringement cases, alleging "rampant copyright infringement".

Other real estate movers of the week include Newmark (NMRK [https://seekingalpha.com/symbol/NMRK]) (+11.26% W/W), Compass (COMP [https://seekingalpha.com/symbol/COMP]) (+8.31% W/W), JBG SMITH Properties (JBGS [https://seekingalpha.com/symbol/JBGS]) (+7.01% W/W), Offerpad Solutions (OPAD [https://seekingalpha.com/symbol/OPAD]) (-32.22% W/W), Fathom (FTHM [https://seekingalpha.com/symbol/FTHM]) (-26.21% W/W), and Ohmyhome (OMH [https://seekingalpha.com/symbol/OMH]) (-21.54% W/W).

Newmark [https://seekingalpha.com/news/4474246-newmark-group-non-gaap-eps-of-0_31-beats-by-0_04-revenue-of-759_1m-beats-by-67_72m], Compass [https://seekingalpha.com/news/4474979-compass-gaap-eps-of-0_07-in-line-revenue-of-2_06b-beats-by-20m], and JBG SMITH [https://seekingalpha.com/news/4473839-jbg-smith-properties-ffo-of-0_15-beats-by-0_05-revenue-of-126_48m] posted solid quarterly results. Meanwhile, Offerpad and Fathom were trading lower ahead of their quarter results.

[xlre]
Weekly, Monthly Performance