The bevy of real estate investment trusts that completed stock offerings over the past two weeks have seen slight to substantial increases in their share prices. There are likely a few reasons behind the increases, including an upward trend in the broader equity markets, according to Rich Moore, an analyst at RBC Capital Markets. Moore also speculated that investors may think that if a REIT has the ability to issue equity, then it has the ability to manage its maturing debt and other expenses. The offerings have been across all sectors, he added.
For the most part, the REITs that have tapped the market have done so to have cash on hand to meet debt maturities. One or two have even earmarked a portion of proceeds for future acquisitions. "Most of the REITs who have issued equity at this point are all trying to be precautionary. The feeling is that we had a nice bounce in the market [so] let's go and issue equity now," Moore said.
Kimco Realty Corp. sold 91.5 million shares on April 3 to address debt maturities. Moore noted that while Kimco's balance sheet is not troubled, it does have $452 million of consolidated debt and $190 million of unconsolidated debt that is coming due this year.