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Real Estate Companies' Debt Offerings Grew, Equity Offerings Fell YOY in Q1'16

Public real estate companies raising capital in the first quarter of 2016 maintained their focus on the debt market, while equity offerings stayed quiet, according to SNL Financial data.

REITs and REOCs issued $9.73 billion of debt during the quarter, up from $8.87 billion in the year-ago quarter and $7.58 billion in the 2015 fourth quarter. Common equity offerings totaled $8.09 billion, up from $7.51 billion in the 2015 fourth quarter but far off the year-ago quarter's total of $18.02 billion.

One quarter into 2016, J.P. Morgan Securities LLC led all real estate debt underwriters with $1.23 billion in deal credit on 11 offerings. Bank of America Merrill Lynch, the 2015 debt underwriting leader, was in second place with $1.08 billion in deal credit across 13 offerings, followed by Morgan Stanley, which finished sixth among debt underwriters in 2015.

Notable debt deals during the quarter included a $1.0 billion offering from Boston Properties Inc.; offerings of $900.0 million and $600.0 million from Crown Castle International Corp.; offerings of $750.0 million and $500.0 million fromAmerican Tower Corp.; and offerings of $800.0 million and $550.0 million from Simon Property Group Inc. 

Public real estate companies raising capital in the first quarter of 2016 maintained their focus on the debt market, while equity offerings stayed quiet.
 Goldman Sachs & Co. led real estate equity underwriters with $1.93 billion in deal credit on seven offerings, posting a strong first quarter after a seventh-place finish among equity underwriters in 2015. The 2015 leader, Bank of America Merrill Lynch, was in second place at quarter's end, with $618.5 million in deal credit on eight offerings. J.P. Morgan Securities was close behind with $606.5 million in credit on six offerings.

The quarter's notable equity offerings included three from STORE Capital Corp. — for $322.0 million$560.1 millionand $841.7 million — for which Goldman Sachs served as the sole book manager.

There were no completed REIT or REOC IPOs in the first quarter, after just one deal was completed in the 2015 fourth quarter: the $48.0 million offering from American Farmland Co..  In all of 2015, five IPOs were completed for a total of $1.22 billion in volume.

Preferred equity offerings, which totaled just $121.9 million across three deals in the fourth quarter of 2015, showed signs of life in the first quarter, with a total of $591.0 million of issuance over six deals. Still, the figure fell short of the year-ago quarter's total of $1.62 billion, also over six offerings.

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 The leading preferred equity underwriters in the first quarter were Bank of America Merrill Lynch and Wells Fargo Securities LLC, which each received $151.3 million in deal credit on three offerings. The two firms tied for sixth among real estate preferred equity underwriters in 2015. Morgan Stanley, the 2015 leader, finished third in the first quarter, with $93.8 million in credit on two offerings.

REIT/REOC