REITS SEEING HEALTHY ACCESS TO DEBT MARKETS, EQUITY ISSUANCE LAGGING: RAYMOND JAMES

The following information was released by the National Association of Real Estate Investment Trusts (NAREIT):

Steven Loffman, managing director at Raymond James, sat down for a video interview during Nareit's REITworld: 2025 Annual Conference in Dallas, Dec. 811.

Loffman described a bifurcated capital markets environment for REITs. While equity markets remain challengedwith many REITs trading at discounts to NAVdebt markets are healthy and accessible, supported by strong balance sheets and manageable loan-to-value ratios. REITs have been able to refinance and raise debt at relatively tight spreads despite elevated benchmark rates, with equity issuance likely coming later in the cycle as valuations improve, he said.

MandA activity picked up in 2025, Loffman noted, particularly privatizations, and he expects that trend to continue into 2026 as long as public REIT valuations lag private market values. He anticipates increased consolidation across lodging, industrial, multifamily, and select specialty sectors. Beyond transactions, Loffman said he credits REIT management teams with effective capital recycling and disciplined balance-sheet management.

Looking ahead, Loffman expects interest rate policy to be a key driver. Cooling labor markets and easing housing inflation could push the Federal Reserve toward a more dovish stance over the medium to long term, which would lower REITs' cost of capital. "As REITs are able to get a smaller discount to NAVand hopefully a premiumthey'll be back in the equity markets making acquisitions and continuing to grow," he said.