REITs raised merely $750M of capital in October, a decrease of 99.99% from $6.84B in the year-ago period, according to a report by the National Association of Real Estate Investment Trusts.
Only 1 capital offering instrument, of secondary debt, was offered during the month, compared to 16 instruments a year ago. Realty Income (O) priced a public offering of $750M of 5.625% senior unsecured notes due Oct. 13, 2032.
This compares with 2 capital offering instruments offered in the month of September. However, the amount of capital raised through the instruments was lesser than October. The sector raised only $536M in the previous month.
Year-to-date until October, REITs have raised a total of $32.65B in capital, down 65.47% from $94.56B in the year-ago period.
The sector continues to decline in value, mainly due to rising interest rates and prevailing high inflation. The falling stock prices continue to discourage investor sentiments, which could be a contributing factor for the lesser capital raising activity.
Many investors assume a 2008-style-kind-of-crash for REITs, Seeking Alpha Author Riyado Sofian said, adding that his opinion differs.