Green bond usage by US real estate investment trusts started to ramp back up in the first half of 2024 with three REITs issuing green bonds that accounted for roughly 5.3% of the total bond proceeds for the half, according to an S&P Global Market Intelligence analysis.
Total proceeds from green bonds by US REITs continually grew from 2018 through 2021, peaking in 2021 at $14.38 billion, or 18.2% of the total bond proceeds for that year. Bond issuance overall by US REITs dropped in 2022 as interest rates started to rise; however, green bonds remained a high proportion of bonds that were issued that year.
In 2023, green bond issuance fell to its lowest level since 2018, when usage of the issuance type started ramping up.
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Green bond issuance reaches $1.43B
Three REITs issued green bonds in the first half of 2024, totaling $1.43 billion in gross proceeds.
The first of the year came from single-family rental REIT American Homes 4 Rent, which closed its $600 million green bond offering Jan. 23.
Office REIT Empire State Realty Trust Inc. issued $225 million of green bonds in a three-tranche private placement April 10. The offering comprised $155 million of 7.20% notes due in June 2029, $45 million of 7.32% notes due in June 2031 and $25 million of 7.41% notes due in June 2034.
Hotel REIT Host Hotels & Resorts Inc. issued $600 million of green bonds May 7. Host Hotels has closed five green bond offerings since 2018, totaling $2.45 billion in gross proceeds, the sixth-largest issuer of green bonds during the analyzed time frame.
Twenty-five US REITs have issued green bonds since 2018.
Datacenter REIT Digital Realty Trust Inc. remained the top issuer of green bonds during the time period, with nearly $6.09 billion in aggregate gross proceeds. Digital Realty Trust sold $500,000 of green bonds in 2015.
Office REIT BXP Inc. and datacenter REIT Equinix Inc. ranked next, with $5.05 billion and $4.88 billion raised through green bond offerings since 2018, respectively.
