REITs or Real Estate Investment Trusts hit a soaring record high of $52.4 billion of unsecured notes this last year. For those who are unfamiliar with REITs, REITs are companies that owns, operates or finances income-producing real estate, according to Investopedia. Essentially turning the real estate market into the stock market.
For a company to qualify as an REIT they have to follow a number of guidelines, one of which is trading on a major stock exchange in order to provide investors with a liquid stake in real estate. REITs tend to specialize in a certain sector of real estate like office REITs for example, which essentially can be only one part of a REITs large portfolio.
This years REITs beat previous years records, 2016 set a record of $38.6 billion, 36% down from this years new record of $52.4 billion. This years total of 75 REITs issued a whomping 131 bonds, a great deal of those REITs dealing in the cell tower and data center sector.
Coming in second was REITs that owned retail properties – with over 22 deals worth more than $8.9 billion. In addition to setting new records, interest rates are at a favorable state for investors which seems to show a great amount of promise for these investors this coming year. The 131 bonds issued held an average coupon rate of 4%, which is the same rate for ten-year bonds which also had a median coupon of 3.875%.
For a more in depth analysis and to learn more about REITs and its future for this coming year, check out Commercial Real Estate News’, “REITs Float Record-Shattering $52.4Bln of Unsecured Notes in 2017.”
Dalesmy Gonzalez is a graduate of Western Washington University where she studied Business Administration with an emphasis in Marketing.
She specializes in optimizing digital marketing websites for commercial real estate brokers and connecting buyers, sellers, and investors across the US.