Capital Markets Receptive to REITs

Keven Lindemann

In the latest episode of The REIT Report: NAREIT's Weekly Podcast, Keven Lindemann of S&P Global Market Intelligence discussed REITs' capital raising actives in 2016.

REITs raised 11 percent more capital through the end of 2016's third quarter than they did in the year-earlier period.

"That's certainly an indication that the companies in the [REIT] industry have healthy access to the capital markets," Lindemann said.

Trends have shifted recently, according to Lindemann.

"Given all the uncertainty in the markets and recent declines in REIT stock prices, capital raising certainly has slowed down for the past weeks," he said.

Lindemann pointed out REITs' capital raising has tilted more towards senior debt in '16 than in 2015. Conversely, IPOs have been scarce. Overall, equity issuance has been flat relative to the previous year.

Lindemann noted that at-the-market equity offerings by REITs have become more popular this year, driven by trends in share prices.

"Companies are regularly tapping the equity markets on an ongoing basis, as opposed to the big underwritten offerings," he said.

Newer REIT sectors--such as data center, infrastructure student housing REITs--have been more active in the capital markets this year than some other the more established sectors, Lindemann said.

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