Capital Raises for REITs

  • Equity issuance totaled $10.2 billion, including $9.7 billion raised through common equity offerings and $545 million raised through preferred equity offerings. Total equity issuance in 2021: Q1 was $13.2 billion, with $6.1 billion in 2020: Q1.
  • Debt issuance totaled $10.0 billion raised at the secondary market, down from the $22.1 billion issued in 2021: Q1 and $21.5 billion in 2020: Q1.
  • At-the-market equity issuance was $5.2 billion in 2022: Q1, following $6.7 billion in 2021: Q4. In 2021, $21.8 billion was raised at-the-market, helping propel REITs to a record $133.6 billion raised.
Source: NAREIT
Joey Hirendernath's avatar
Interesting that debt issuance is now coming back down from covid, do you know if the broader REIT market has been paying down that debt at all, or they now just more levered after covid?
Ayesha Tariq, CFA's avatar
@joeyhirendernath So net change in debt has increased. Many of the REITs took advantage of the low rates to refinance their debts. They have been paying the debts down. I have no knowledge of any serious delinquencies.

What's interesting now is that with the economy opening up, many of the leasing REITs will be able to increase rentals. If you look at the REITs during the pandemic, most of their rental income rates were below market as they had to offer deferrals and holidays. This will start to fall away and the stronger players like $PLD for example will have nice upside potential.

[I get carried away when it comes to REITs, hence the long answer :) ]
Joey Hirendernath's avatar
@ayeshatariq always appreciate your explanations :)