Why Front Yard Residential Stock Rocketed 53% in October, but Empire State Realty and CoreCivic Fell
Shares of real estate investment trust (REIT) Front Yard Residential (NYSE: RESI) rose a dramatic 53% in October, according to data from S&P Global Market Intelligence. That compares to a decline of 12% at Empire State Realty Trust (NYSE: ESRT) and a drop of roughly 20% at CoreCivic (NYSE: CXW). For reference, the broader REIT sector, as measured by the Vanguard Real Estate ETF, was lower by 3%. You have to dig into the details to understand what was going on with these three REITs.
Front Yard Residential, which owns single-family rental properties, has been dealing with dissident shareholders. Two large investors were complaining that the company needed to narrow the discount between its market valuation and the value of the assets it owns. The key suggestion was that Front Yard Residential should liquidate, returning cash to investors as the portfolio was slowly sold. That didn't happen.
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Source Fool.com
