According to the Nareit Total REIT Industry Tracker Series report, third-quarter data reveals that REITs maintain well-structured debt. The majority of their total debt (79%) is unsecured and listed REITs have 91% of their total debt at a fixed rate.
Nareit also reports that as of Q3 2023, REIT balance sheets are robust and prepared for potential economic and capital market uncertainties. On average, leverage ratios remain modest with a debt-to-market assets ratio at 36.2%. Additionally, the weighted average term to maturity for REIT debt is 6.5 years with an interest rate of 4.0%.
John Worth, Nareit’s EVP of Research & Investor Outreach stated that “REITs’ balance sheets are in excellent condition due to disciplined management practices.” He also notes that this discipline combined with strong operational performance allows them to navigate tighter credit conditions and high interest rates successfully.
The article concludes by stating that according to Nareit’s findings, “REIT finances remain healthy,” showcasing the industry’s resilience in managing financial challenges effectively.
