US equity REITs raise $4.25B through ATM programs in Q3

Editor's note: Beginning with S&P Global Market Intelligence's second-quarter 2019 analysis of at-the-market program usage by real estate investment trusts, Market Intelligence included forward at-the-market sales settled during the respective quarter as part of the total capital raised. Forward sales conducted during the quarter but not yet settled as of quarter-end were not included in the quarterly total. Because of this methodology change, prior quarterly totals presented in this article may not match historical articles published by Market Intelligence.

Proceeds raised by US equity real estate investment trusts through at-the-market equity offerings rose during the recent quarter.

In total, 38 REITs utilized their at-the-market (ATM) offering programs during the third quarter, raising $4.25 billion in aggregate. The quarterly total represents a 12% increase compared to the $3.80 billion raised in the quarter prior but a 36% decline from the record-breaking $6.67 billion raised during the third quarter of 2021, according to data compiled by S&P Global Market Intelligence.

Largest issuers for Q3 utilized forward sale agreements

Welltower Inc. raised the most capital through its ATM program in the quarter. The healthcare REIT sold 9,470,347 shares on a forward basis during the quarter while also settling 9,142,034 of its outstanding forward sale agreements for gross proceeds of $842.0 million. As of Sept. 30, Welltower had approximately $1.49 billion of outstanding forward sale agreements under its ATM program.

Datacenter REIT Equinix Inc. issued 580,833 shares under its ATM program in the third quarter and settled its remaining 579,873 outstanding forward sale agreements, combining for $797.2 million in net proceeds.

Industrial REIT Rexford Industrial Realty Inc. sold 5,127,587 shares during the third quarter at an initial forward sale price of $64.73 per share. In addition, Rexford settled 11,515,553 shares from its forward sale agreements for $697.0 million in net proceeds.

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Realty Income Corp., a single-tenant retail REIT, sold 29,528,400 shares on a forward basis during the recent quarter while settling 9,532,853 of its outstanding forward sale agreements for $696.6 million in gross proceeds.

Manufactured home REIT Sun Communities Inc. and single-tenant retail REIT Agree Realty Corp. followed, raising $275.5 million and $214.8 million, respectively, through settled forward sale agreements.

Proceeds by property sector

By property sector, single-tenant retail REITs raised the most capital through ATM programs during the quarter, at $1.19 billion in aggregate.

The healthcare and datacenter sectors followed, raising $854.7 million and $797.2 million, respectively.