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REITs advised to recap in the equity market before rally is over


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Does anyone own any REIT equity or preferred shares?




"REITs with total debt to capitalization near 60% and debt obligations as a percentage of assets of more than 35% through 2012 are expected to come to market to issue equity in the coming weeks and months, underwriters currently in talks with REITs told dealReporter.


There is an appetite from institutional investors to support high quality names across all five food groups: residential, commercial, retail, hospitality, and industrial. Investors are willing to take up to USD 100m chunks of fresh equity while asking for 5% to 9% discounts on common shares, underwriters said. An increased flow of reverse enquiries from institutional investors are driving some of the recent equity deals, the sources said.


Kimco’s 91.5m equity offering last week, was prompted by demand from the market, said sources close to the company.


“We have been telling people get out and issue equity and be one of the first guys to do it; there is not enough money to recapitalize everyone,” said one underwriter currently working on similar deals."......



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