REITs Return to Capital Markets in 2024: What It Means for Investors and the Real Estate Sector
In 2024, publicly-traded REITs made a remarkable comeback to capital markets, raising an impressive $64.9 billion by the end of Q3. With interest rates stabilizing and investor confidence rebounding, REITs have successfully utilized debt issuance to drive their growth agendas. Retail and data center REITs are leading this surge, with Realty Income and Digital Realty Trust at the forefront.
Debt offerings are central to this fundraising push, partly due to recent rate cuts favoring REIT dividends and earnings. Although property acquisitions remain tempered, REIT stock prices outperformed the broader stock market, encouraging optimism for equity-based fundraising in the future. New IPOs from Lineage and FrontView REIT are encouraging signs of market momentum.
Investors can expect REITs to lean further into growth and acquisitions as rates potentially decline. The resurgence of REITs highlights the broader recovery in commercial real estate and signals promising prospects for expansion in the coming quarters.
Source: CoStar News
Author: Mark Heschmeyer