REIT Bond Offerings surge in first half.

Corporate bond offerings from traditional equity REITs increased 37% during first-half of 2019 according to data compiled by REIT/BASE®. Excluding private placements, the six-month total was $16.4 billion, or a $4.5 billion increase over first-half 2018. This PDF report summarizes market activity by individual REIT and bond issue.

A total of 28 REITs have tapped the market this year, with activity being driven by normal refunding needs and a favorable yield curve. But with potential for increased market volatility ahead of the 2020 elections, CFO's may be deciding that now is the time to take risk off the table. Notably, Digital Realty (DLR) issued $900 million of 10-year bonds in June, using proceeds to fund a concurrent tender offer for $900 million of bonds due in 2020 and 2021. Other highlights for YTD 2019 include:
    • 10-year bond offerings dominated the calendar at 64% of volume, followed by seven-year (16%) and five-year (7%) deals. There were three 30-year offerings from Alexandria (ARE, +187), Regency (REG, +165) and Ventas (VTR, +190), which represented 5% of first-half activity.
    • Healthcare was the most active sector by volume (23% of first-half issuance), led by offerings from each of the ‘Big 3’ (HCP, VTR, WELL).
    • Digital Realty (DLR) was the largest individual issuer at $2.1 billion. Offerings were completed in both Euro and U.S. Dollar currencies.
    • Equity Residential (EQR) achieved the lowest coupon for a ten-year offering (3.00%), followed by Camden Property (3.15%) and Federal Realty (3.20%).
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