REITs Hit Record $126B In Capital Raised

Real estate income trusts had their best year ever — and it only took three quarters to do it.

U.S. REITs raised more than $126B from equity and debt offerings, plus initial public offerings, during the first three quarters of 2021, more than any other full year, according to a new Nareit report. The final tally for 2021, once fourth-quarter figures are added, will be even higher, the organization says. 

As of Q3 2021, equity issuance by REITs totaled more than $54B. The bulk of that was from $33B raised via common equity offerings, but it also included $15B raised in at-the-market offerings and $6B raised through preferred equity offerings. Total equity raised in 2019 was $50B, with $33B raised in 2020.

Debt issuance by REITs in 2021 totaled $73B raised at the secondary market, roughly the same as in 2020 but more than the $63B raised in 2019. A majority of the debt, 57%, was raised in the form of secondary debt, with 38% from secondary common equity and 5% from secondary preferred equity, according to the report.

During the first three quarters of last year, four REIT IPOs also raised $837M, Nareit reports, and there were 15 deals to acquire REITs by REITs and other investors. Data centers accounted for 39% of the total M&A deal volume, led by deals for CyrusOne and CoreSite, while retail was almost as popular, accounting for 38% of deal volume with headline agreements like Kimco Realty Corp. and Weingarten Realty Investors' merger.

REITs remained net buyers of real estate throughout the coronavirus pandemic, with $15.5B in net acquisitions in Q3 2021 and $18.3B in Q2. REITs were particularly interested in healthcare, retail and office assets, buying a net $5.2B, $2.5B and $2.1B of those property types, respectively, in Q3 2021.