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US REIT at-the-market usage continues to rise in Q2'19 with $3.22B raised

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US REIT at-the-market usage continues to rise in Q2'19 with $3.22B raised

Editor's note: Beginning with this iteration of S&P Global Market Intelligence's analysis of at-the-market program usage by real estate investment trusts, S&P Global Market Intelligence included forward ATM 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. These offerings were instead added in a separate table. Because of this methodology change, prior quarterly totals presented in this article may not match historical articles published by S&P Global Market Intelligence. Click here to download these charts in Excel format.

At-the-market program usage by U.S. equity real estate investment trusts continued to soar in the second quarter of 2019.

Forty-seven U.S. equity REITs tapped their at-the-market common equity sales programs during the quarter, collecting $3.22 billion in total — 8.6% higher than the $2.97 billion raised the quarter before.

The healthcare sector continued to raise the most capital through ATM programs, at $800.3 million. HCP Inc. out-raised all other equity REITs, selling 5.9 million common shares under its ATM program through direct issuances for $189 million in net proceeds. It also settled 5.5 million shares of outstanding forward ATM contracts for $171 million in net proceeds. All together, HCP raised roughly $360 million in net proceeds during the quarter.

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Equinix Inc. followed, with 722,361 shares sold during the quarter for $348.2 million of net proceeds.

Sabra Health Care REIT Inc. rounded out the top three, selling 11,095,425 common shares through its ATM program for $217.3 million of gross proceeds. As of quarter-end, Sabra had $282.7 million of capacity remaining under the program.

Several REITs utilized the forward provisions under their ATM programs to allow for the sale of common stock at a future date.

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HCP utilized its forward sales provisions to allow for the sale of an additional 10 million common shares during the quarter, while also settling 5.5 million of its forward sales. At quarter-end, 8.1 million shares remained outstanding under HCP's forward contracts with a weighted average price of $31.35 per share, after commissions.

Office REIT Alexandria Real Estate Equities Inc. entered into forward sales agreements during the quarter to sell 3.7 million shares of common stock through its ATM program at a weighted average price of $143.73 per share, while healthcare REIT Welltower Inc. utilized its forward sale provisions to allow for the sale of 2,194,575 shares, with maturity dates set for the fourth quarter.

Easterly Government Properties Inc. and Spirit Realty Capital Inc. used forward sales agreements to sell 1,200,712 shares and roughly 906,474 shares, respectively, during the quarter, all of which were physically settled.

Fourteen U.S. REITs announced new ATM programs since S&P Global Market Intelligence's prior update in mid-May.

Invitation Homes Inc.'s new $800 million program launched Aug. 22 marked the largest of the new announcements.

W. P. Carey Inc. also initiated a new $750 million program on Aug. 9, replacing its prior ATM program established in February.

Casino REIT Gaming & Leisure Properties Inc.'s $600 million program established Aug. 14 was the next-largest ATM program announced during the period.

Rexford launched a new $550 million ATM program June 13, replacing its previous $450 million program, substantially all of which had been utilized.

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