Short Sellers Line Up to Bet on US Commercial Property Pain (1)

Pressure at regional banks, a continuing downturn in US office prices and elevated interest rates have money managers piling back into bearish wagers on one of their favorite sectors: commercial property.

Data center real estate investment trust Equinix Inc. slumped to the lowest since January on Wednesday after Hindenburg Research said it was betting against the firm’s shares, while S&P Global said earlier this month that REITs are the most shorted stocks globally.

Investors have been rattled in recent weeks by lenders including New York Community Bancorp. and Deutsche Pfandbriefbank AG setting aside larger provisions for property-loan losses. The ongoing ...