SRET - REITs reduce reliance on borrowings lowered leverage ratios: Nareit

Nareit T-Tracker data indicated that REIT exposures to interest rates are at an all-time low as most of the companies have reduced their reliance on borrowings, thereby lowering leverage ratios considerably over the past decade.Lower exposures to interest rates have been achieved by REITs through raising permanent equity capital to fund their portfolios.Between 2009 and 2019, REITs raised $385B of common equity which includes $28B in IPOs, $297B of secondary equity offerings, and $60B raised through at-the-market equity programs.Debt-to-market assets ratio contracted significantly to 32.8% in 2021 from record peak levels of 64.7%.The interest expense share of NOI fell from 38% in 2007, to 21.6% in 1Q21;  REITs have locked in these low interest expenses by lengthening the maturity of their debt from under 5 years in 2008 to 7-1/4 years currently.The reduction of exposures to interest rates has occurred across nearly the entire REIT universe.Interest coverage multiple of less than 3x—represent

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REITs reduce reliance on borrowings, lowered leverage ratios: Nareit