Can at-the-Market Offerings Affect REIT Debt Maturity Choice?

Abstract

This study examines the differences in debt maturity choice between Real Estate Investment Trusts (REITs) with At-the-Market (ATM) offerings and those without, as well as the subsequent changes in REIT debt maturity following the adoption of ATM programs. We find that ATM REITs consistently maintain higher levels of long-term debt than non-ATM REITs, even after implementing ATM offerings. It suggests that the capital raised through ATM offerings is not primarily utilized to reduce long-term debt. Additionally, the study highlights that small REITs experience a significant increase in short-term debt when actively employing ATM offerings. This outcome indicates that ATM programs offer smaller REITs the necessary financial flexibility to raise funds and address short-term debt obligations.

Keywords:

• ATM offerings
• Debt Maturity
• Equity REIT

Disclosure statement

No potential conflict of interest was reported by the author(s).

Panel C. Large REIT effect

Notes

1 For more details on the variable construction, please refer to section 3.2 or appendix A.

2 The ATM offering, ATM program and ATM equity distribution program are used interchangeably in this study.

3 For more details on the variable construction, please refer to section 3.2 or Appendix A.

4 The total sample of ATM programs is available upon request.