US REIT Capital Offering Activity Soars in September
October 18, 2019
According to an article from S&P Global Market Intelligence, capital markets activity by U.S. equity REITs rocketed in September, with $17.88 billion raised through capital offerings during the month — the highest amount raised in a single month year-to-date.
The large majority of the capital came through senior debt offerings, totaling $14.85 billion. Common equity offerings accounted for $2.29 billion of the total, while preferred equity offerings during the month totaled $738.3 million.
Regional mall landlord Simon Property Group Inc. raised the most capital during the month, selling $3.50 billion of senior notes. The senior debt offering came in three tranches: $1.0 billion of 2.00% notes due Sept. 13, 2024; $1.25 billion of 2.45% notes due Sept. 13, 2029; and $1.25 billion of 3.25% notes due Sept. 13, 2049. The REIT plans to use proceeds from the offering to redeem some of its other outstanding notes.
Hotel REIT Service Properties Trust, formerly known as Hospitality Properties Trust, followed, raising $1.70 billion through its unsecured senior notes offering. Net proceeds from the offering were used to help fund its $2.4 billion acquisition of net-lease assets from Spirit MTA REIT.
Communications-focused American Tower Corp. collected $1.35 billion from its senior debt offering during the month, comprised of $750.0 million of 2.750% notes due 2027 and $600.0 million of 3.700% notes due 2049. Proceeds from the offering will be used to repay existing debt.
Data storage and information management services-oriented Iron Mountain Inc. also completed a $1.00 billion senior debt private placement during the month, with proceeds being used to repay existing borrowings under its revolving credit facility.
The newly completed offerings bring the total capital raised year-to-date by U.S. equity REITs to $75.71 billion, more than double the $33.09 billion raised during the same period in 2018.
The specialty sector — comprised of advertising, casino, communications, data center, energy infrastructure, land, prison and timber REITs — raised the most capital year-to-date of any property sector, at $18.76 billion, followed by the retail and healthcare sectors at $12.56 billion and $11.23 billion, respectively.
Among current or former sponsors of nontraded REITs, VEREIT Inc. raised $888.7 million in a common equity offering completed on September 23, 2019. W. P. Carey Inc. raised $124.0 million in an at-the-market common equity offering completed on September 3, 2019.
Source: S&P Global Market Intelligence
