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REIT balance sheets appear strong, active managers focus on digital transition in the third quarter
Research - NOVEMBER 22, 2024

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REIT balance sheets appear strong, active managers focus on digital transition in the third quarter

by Elise Mackanych

In third quarter 2024, REITs demonstrated well-structured debt, according to Nareit’s REIT Industry Tracker. Leverage ratios proved to be moderate, with debt-to-market assets at 30.7 percent. The average interest rate on total debt was 4.1 percent. Some 79.5 percent of REITs’ debt was unsecured, and 93.1 percent of REITs’ debt was at a fixed rate.

“The market for debt issuance is extremely favorable for REITs given their well-structured debt and strong balance sheets,” said John Worth, Nareit executive vice president of research and investor outreach. “Looking forward, when transaction activity further picks up, REITs will more likely be buyers than sellers, which may lead to accretive growth.”

REITs saw positive performance in important metrics, with net operating income (NOI) growing at 1.7 percent year-over-year, and same-store NOI increasing 3.1 percent. Strong leasing demand for REIT properties sees them with a 6.4 percent vacancy rate. However, R

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