Top 12 Beaten-Down REITs Ready for a Rotation Rally

6. Arbor Realty Trust, Inc. (NYSE:ABR)

Number of Hedge Fund Holders: 22

Year-To-Date Performance: -36.08%

Stock Upside: 26.01%

Arbor Realty Trust, Inc. (NYSE:ABR) is one of the top beaten-down REITs ready for a rotation rally. On July 2, Piper Sandler analyst Crispin Love lowered the price target on Arbor Realty Trust, Inc. (NYSE:ABR) to $5.50 from $8, while keeping an Underweight rating on the REIT.

The reduction reflects Piper Sandler’s view that the mortgage lending environment remains difficult heading into the year’s third quarter. This backdrop, Love explained, is pushing the firm to favor agency-focused mortgage names over loan originators like Arbor Realty. The analyst added that a key driver behind this shift is that 30-year mortgage rates have stayed elevated, hovering around the 6.50% mark. This scenario continues to squeeze demand for new loan originations and pressures companies like Arbor Realty that rely heavily on origination volume for revenue, Love noted.

Meanwhile, on June 30, Arbor Realty announced the pricing of an upsized private placement of $325 million in aggregate principal amount of 6.25% Convertible Senior Notes due 2029. The company said it sold the Notes to qualified institutional buyers under Rule 144A of the Securities Act.

The deal grew from an initially proposed $300 million offering that the company and direct lender had announced just a day earlier. Arbor Realty said it upsized the offering due to market demand.

Arbor Realty Trust, Inc. (NYSE:ABR) is a real estate investment trust. It invests in a diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets in the United States, and operates through Structured Business and Agency Business segments.

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