Core Insights - The capital raising activities among REITs in 2025 have shown a rational approach, indicating management teams' views on their valuations [1][38] - REITs have issued $9.95 billion in equity and $34.5 billion in debt year-to-date as of early September 2025, with a notable decline in common equity issuance compared to the previous year [2][4] - The median price to net asset value (P/NAV) for REITs is 82.8%, leading to a cautious stance on equity issuance when trading below NAV [4][32] Equity Issuance Trends - Common equity issuance has significantly decreased, particularly among REITs trading below NAV, with most equity raised coming from healthcare REITs trading at premiums [5][9] - Welltower and CareTrust, trading at 200% and 154% of NAV respectively, accounted for the majority of equity issuance, reflecting a strategic move to capitalize on their overvalued stock [11][12][14] Debt Issuance Dynamics - REITs are opting for debt issuance over equity when trading at discounts to NAV, with Millrose Properties leading the debt issuance with $1.5 billion raised at 6.375% [15][18] - The trend shows a compression in spreads for REIT debt, with many REITs upgrading their financing to longer terms and cheaper rates [24][35] Strategic Financial Management - Companies like UMH Properties are utilizing equity issuance to fund growth strategies, but are now recognizing the need for share buybacks due to trading at a significant discount to NAV [30][31] - The current environment allows under-levered REITs to raise leverage in an accretive manner, with opportunities for acquisition as debt becomes cheaper [34][36] Market Discipline and Future Outlook - The REIT sector has shown improved discipline in capital raising activities, with a focus on shareholder value and rational decision-making [37][38] - The overall capital market discipline is expected to benefit the REIT sector in the long run, as companies avoid dilutive equity issuance and focus on strategic debt financing [38]