REITs Raise $23.3B in Q3 Amid Robust Capital Activity, Slow M&A

U.S. REITs raised $23.3B in Q3, with $15.4B from debt offerings, $5.1B from the largest REIT IPO ever, and $2.8B from secondary equity offerings.
Year-to-date, REITs have raised $40.8B in secondary debt, significantly higher than the $23.9B raised during the same period in 2023.
M&A activity remains slow in 2024, with just one deal valued at $9.2B, compared to $44B in 2023 acquisitions.
Property transactions have declined, with Q2 seeing $7.3B in acquisitions and $6.1B in dispositions, a stark contrast to the higher activity seen in previous years.

Key Takeaways

In Q3, U.S. REITs raised $23.3B through a combination of secondary debt and equity offerings, as well as a landmark IPO, as reported by reit.com.

By The Numbers

Of this total, $15.4B came from debt, $5.1B from a single IPO—the largest REIT IPO in history, in fact—and $2.8B from secondary common and preferred equity offerings.

This activity underscores REITs’ strong access to capital markets as they continue to leverage favorable debt conditions.

Debt Leads The Way

Debt issuance saw a significant uptick, rising 24% quarter-over-quarter.

Year-to-date, REITs have raised $40.8B through secondary debt offerings, a marked increase compared to the $23.9B raised in the same period of 2023.

In Q3, the average yield to maturity for unsecured debt offerings stood at 5.2%, with a spread of 1.4% above similarly dated treasuries.

Muted M&A Activity

In stark contrast to the robust capital raising, M&A activity has been notably quiet in 2024. Only one deal, valued at $9.2B, was completed during the year, a sharp drop from the $44B in REIT acquisitions announced in 2023.

Over the past three years, acquisitions of REITs totaled $225B, with the majority being intra-REIT deals in the same property sector.

Deal Slowdown

Property acquisitions also slowed significantly. In Q2, REITs recorded $7.3B in property acquisitions and $6.1B in dispositions. This is a substantial drop from 2023, which saw $70.7B in acquisitions.

The healthcare, industrial, and retail sectors led Q2 acquisitions, but overall transaction volume remains subdued.

Looking Ahead

Despite the subdued M&A and property transaction activity, REITs continue to demonstrate strong capital-raising capabilities, particularly through debt markets.

However, whether this capital activity can reignite acquisition and property transaction volumes remains to be seen as the market navigates ongoing economic challenges.