REITs Still Hitting Capital Markets Hard

CHARLOTTSVILLE, VA-So far US equity REITs have raised a total of $7.63 billion in capital for 2014, as of Feb. 14, according to SNL Financial. That compares to $6.14 billion raised during the same period in 2013.

REITs have used senior debt offerings to generate most of their capital, of some $6.16 billion. Capital raised via common equity equaled $1.47 billion, the largest of which was Altisource Residential's common equity offering that completed on Jan. 15 and generated $482.8 million.

During the same period in 2013, REITs had raised $2.74 billion from common equity offerings, $2.09 billion from senior debt issuances and $1.31 billion from preferred equity offerings.

Retail REITs led the pack with $3.95 billion. Industrial REITs and specialty REITs followed at a second and third, with $957.2 million and $750.0 million, respectively.

Other significant common equity transactions so far have included Parkway Properties' $214.6 million offering and Hudson Pacific Properties' $204 million offering.

Ten debt offerings were completed by REITs in 2014 as of Feb. 14, with American Realty Capital Properties generating the largest proceeds through three offerings that totaled $2.55 billion. The REIT plans to use the proceeds to fund its acquisition of Cole Real Estate Investments.

 Prologis completed the second-largest single debt offering in the period, raising $957.2 million, which it intends to use for general corporate purposes.

Simon Property Group completed two $600 million offerings in January for which it will use the proceeds to repay a total of $600 million of borrowings from its $4 billion unsecured credit facility.