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US REITs draw down $37B from revolving credit facilities in Q1

Editor's note: Click here to download the charts and underlying data used in this analysis.

As the coronavirus pandemic gripped the world in the first quarter, U.S. real estate investment trusts drew down $37.19 billion from their credit facilities. At March 31, REITs in aggregate had drawn down $61.90 billion, a 150.5% increase compared to the $24.71 billion drawn at year-end 2019.

Economic conditions deteriorated rapidly in the first quarter as municipalities enacted social distancing policies in an effort to combat the spread of COVID-19. Retail and hotel landlords, which both saw their properties closed and/or operations drastically scaled back, were the most aggressive in tapping their credit facilities.

This analysis includes all 175 publicly traded REITs that trade on the Nasdaq, NYSE or NYSE American and that had reported earnings as of June 9. The combined market capitalization for those REITs was $1.180 trillion at June 9. Of the REITs included in the analysis, 165 carry credit facilities. On a market-cap basis, 99.3% of REITs analyzed have credit facilities.

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Retail REITs — comprising shopping center, regional mall, single-tenant and outlet center landlords — collectively drew down $13.18 billion. Nearly every shopping center REIT tapped its credit facility, bringing the segment total to $5.65 billion.

Federal Realty Investment Trust drew down $990 million of its $1 billion facility, followed by Retail Properties of America Inc. at $831.7 million, SITE Centers Corp. at $640 million and Brixmor Property Group Inc. drawing down $638.5 million.

Wheeler Real Estate Investment Trust Inc. was the sole shopping center REIT to pay back part of the outstanding balance under its revolving credit facility during the quarter, and Retail Value Inc. had the full $30 million capacity available under its facility at quarter-end.

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All seven regional mall REITs utilized their credit facilities during the quarter, raising $5.49 billion. Simon Property Group Inc. withdrew the most capital of any U.S. equity REIT, at $3.76 billion, bringing the total amount outstanding under its revolving credit facilities to $3.875 billion at quarter-end. As of March 31, Simon still had $3.63 billion of remaining capacity under its credit facilities, the third-most capacity of any REIT.

Also in the mall sector, Macerich Co. drew down $660.6 million from its $1.5 billion revolving credit facility during the quarter, while CBL Properties withdrew $365 million and Washington Prime Group Inc. drew down nearly $320.3 million.

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Hotel REITs also drew down the majority of their credit facility capacity during the quarter. Host Hotels & Resorts Inc., the largest hotel REIT by market capitalization, withdrew $1.49 billion during the quarter, nearly the entire capacity of its $1.5 billion facility, followed by Park Hotels & Resorts Inc., which drew down its full $1 billion capacity.

Pebblebrook Hotel Trust also withdrew roughly $478.2 million of its credit facility, leaving $31.8 million of remaining capacity, while RLJ Lodging Trust withdrew $400 million of its $600 million facility and Ryman Hospitality Properties Inc. drew down approximately $391.9 million.

Six hotel REITs in total — including Park Hotels — withdrew the full remaining capacity available on their revolving credit facilities. Outside the hotel sector, net-lease-focused STORE Capital Corp. and casino REIT MGM Growth Properties LLC also drew down the maximum capacity available under their facilities.

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