US equity REIT capital offerings more than quadrupled month over month in May

Editor's note: This article is published monthly with current data available at that time.

Capital markets activity by US equity real estate investment trusts skyrocketed in May, with the entire industry pulling in $9.88 billion for the month, compared to $2.11 billion in April.

On an annual basis, the amount of capital raised in May increased 29.5% from the $7.63 billion collected during May 2023, according to S&P Global Market Intelligence data.

Nearly all of the capital raised in May came through debt as REITs secured $8.18 billion through note offerings. Common equity offerings accounted for $1.69 billion, while the remaining $442,000 was obtained through a preferred equity offering.

Digital Realty Trust amassed the most capital in May

Datacenter-focused Digital Realty Trust Inc. raised the most capital during the month, collecting $1.69 billion through its follow-on common equity offering completed May 8. The REIT intends to contribute the net proceeds from the sale to its operating partnership, which will use the proceeds to temporarily repay borrowings outstanding under its global revolving credit facilities, acquire properties and businesses, fund development opportunities, and provide for working capital and other general corporate purposes.

Hotel landlord Service Properties Trust followed, pulling in $1.20 billion after selling $700 million of 8.375% unsecured notes due 2029 and $500 million of 8.875% unsecured notes due 2032. The company intends to use the net proceeds to redeem the $800.0 million principal amount outstanding of its 7.50% senior unsecured notes due 2025 and to fund the purchase of any and all of the $350.0 million principal amount outstanding of its 4.50% senior unsecured notes due 2025.

Communications REIT American Tower Corp. came in third as it sold two sets of notes worth $541.8 million each with maturity dates of 2030 and 2034. The REIT intends to use the net proceeds to repay existing debt under its $6.0 billion senior unsecured multicurrency revolving credit facility, to the extent it has been drawn upon in euros, and to repay existing debt under its €825.0 million unsecured term loan, among other things.

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The largest single common equity offering during the first five months of 2024 was Digital Realty Trust's $1.69 billion follow-on common equity offering. Hotel landlord Ryman Hospitality Properties Inc.'s $1.00 billion of unsecured notes, completed March 21, was the largest single debt offering completed year to date.

At $2.88 billion, Prologis Inc. has attracted the most capital overall year to date, followed by American Tower at $2.83 billion.

Specialty sector leads year-to-date capital offerings

The offerings in May brought the year-to-date total to $28.93 billion, down 1.7% from what the sector raised during the first five months of 2023.

The specialty sector — including advertising, casino, communications, datacenter, energy infrastructure, farmland and timber — accounted for the largest share of total capital raised thus far in 2024 with $6.27 billion. The retail segment came in second at $5.00 billion, followed by the industrial sector at $4.10 billion.