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REIT Volatility

Shares of seven retail REITs fell Monday, apparently in response to an analyst report that downgraded them from hold to buy.

In a client note, Stifel Nicolaus analyst David M. Fick reduced the REIT sector to a "negative bias." He also downgraded 15 equity REITs and six commercial finance REITs to "Hold" from "Buy."

He cited a number of factors hurting the sector including rising interest rates, a lack of investor interest, low dividend yields and weaker fundamentals.

Increasing interest rates will hurt private market real estate values, while investors are no longer looking to real estate as much, he said.

Companies affected by the sell-off including Kimco Realty Corp., Ramco-Gershenson Property Trust, Cedar Shopping Centers Inc., Kite Realty Group Trust, Simon Property Group Inc., Tanger Factory Outlet Centers Inc., and Weingarten Realty Investors. All seven companies fell again in trading on Tuesday (as did every other retail REIT).

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