US Listed REITs Raise $2.8 Billion in At-the-Market Offerings in Q4 2018
March 22, 2019 | James Sprow | Blue Vault
According to S&P Global, thirty-five U.S. equity real estate investment trusts raised more than $2.82 billion in at-the-market common equity sales programs during the 2018 fourth quarter, a 31.9% increase over the amount raised during the prior quarter and a 30.7% increase year over year.
The sector with the largest total capital raised was Single Tenant, with $870.4 million. Next was the Healthcare sector with $630.2 million.
| US Listed REITs Raise $2.8 Billion in At-the-Market Offerings in Q4 2018 | |||
| ($M) | ($M) | ||
| Sector | Q3 2018 | Q4 2018 | % Change |
| Single Tenant | 395.2 | 870.4 | 120% |
| Healthcare | 226.9 | 630.2 | 178% |
| Diversified | 248.3 | 571.8 | 130% |
| Industrial | 234.2 | 363.3 | 55% |
| Data Center | 265.7 | 114.3 | -57% |
| Self-Storage | 46.7 | 80.1 | 72% |
| Shopping Center | 77.0 | 48.7 | -37% |
| Multifamily | 27.9 | 48.5 | 74% |
| Communications | 64.4 | 45.6 | -29% |
| Advertising | – | 43.0 | NMF |
| Land | – | 3.5 | NMF |
| Office | 396.0 | 3.1 | -99% |
| Manufactured Home | 118.8 | – | -100% |
| Hotel | 38.9 | – | -100% |
| Total | 2,140.0 | 2,822.5 | 32% |
The trends in capital raise among listed equity REITs may be indicative of the sector rotation underway among nontraded REITs, as the capital raised by listed REITs will be deployed to pursue acquisitions in the different sectors in which nontraded REITs compete to construct their portfolios. For example, the drastic decline in the capital raise by listed REITs focused in the Office sector may indicate a significant trend away from those types of investments. The only listed REIT raising capital in the Data Center sector was Equinix, a cloud computing business that reportedly serves 48% of the Fortune 500 and recently had a market cap of $38 billion, with over 200 data centers in 52 major business markets on five continents. By comparison, the largest portfolio of data centers among the nontraded REITs is in Carter Validus Mission Critical REIT II with 29 data centers purchased for a total of $957 million.
Related: February NTR Sales Up, Nontraded BDC Sales Down from January
The equity offerings announced so far for 2019 by listed REITs include $500 million by W. P. Carey, a current sponsor of three nontraded REITs, that has withdrawn from new programs in the nontraded REIT sector. Digital Realty Trust, another data center listed REIT, has filed an offering of $1.0 billion in equity for 2019. The company has 214 data centers around the world, as of December 31, 2018., signaling a potential rebound in the data center sector. Twelve U.S. equity REITs have announced new at-the-market programs year-to-date through March 18, representing $5.35 billion in total capacity.
Sources: S&P Global, Blue Vault
