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In the days just before the December consumer price index (CPI) is to be released, the iStar Inc. (NYSE:STAR) real estate investment trust (REIT) hit new lows for the year. The CPI report is followed closely by Wall Street as the numbers are believed to indicate the direction of inflation.
Will the Federal Reserve respond on Dec. 15 by raising the basic interest rate to the expected 0.5%, or will it go to 0.75%?
By heading in a continued downward direction, an interest rate-sensitive REIT such as
iStar is showing how concerned investors are about this. This amount of selling as the market heads into the CPI release suggests that iStar shareholders are less than excited about the number however it comes in.
The New York-based company owns, develops and manages real estate projects. iStar has a market capitalization of $641 million, making it one of the smaller REITs compared to major players in the sector. Owners of shares receive a 6.76% dividend.
The daily price chart for iStar is here:
It’s been steadily lower since early April when shares could be purchased for around $22. Note that the stock is trading below the downtrending 50-day moving average (the blue line) and the downtrending 200-day moving average. The relative strength indicator (RSI) below the price chart is down in the “oversold” range.
The weekly chart for iStar looks like this:
You can see that the current price of $7.39 is back within the range of the price that took place during the March-April 2020 pandemic-scare sell-off. The peak price of $26 came in early November 2021, and from that peak to the present is a 71% drop in the REIT’s value.
Some of the recent drop represents the effects of a “special dividend” where the company paid investors 0.07655 shares of Safehold Inc. (NYSE:SAFE) for each share of iStar stock. iStar created and developed Safehold, which launched its initial public offering in 2017 and remains its largest shareholder.
Weekly REIT Report: REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it’s too late. Benzinga’s in-house real estate research team has been working hard to identify the greatest opportunities in today’s market, which you can gain access to for free by signing up for Benzinga’s Weekly REIT Report.
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