Looking at REIT Leverage versus Other Stock Market Sectors
April 23, 2019 | Nicole Funari | Nareit
Do we need to worry that equity REITs are carrying too much debt? I analyzed REITs listed in the S&P 1500 as of February 25, 2019 for their debt issues. While leverage ratios, measured as the ratio of debt to total assets, for REITs did indeed rise in the run up to the financial crisis, post-crisis REITs have brought their leverage ratio back down to below pre-financial crisis levels.
I have been using Blue Vault Partners for the past five years. I have found them to be a valuable, unbiased resource when it comes to evaluating and comparing non-traded REITs. The reports help me analyze which sponsors are doing a responsible job of managing their offerings. This allows me to limit my REIT recommendations to only the most competitive products, and then track those REITs throughout their life cycle.