From Dow Jones & Company:

Commercial real-estate investment trusts (REITs) are seeing a rally in debt this year, even within the office sector that has been struggling due to a rise in office-vacancy rates. Debt issued by office REITs and single-asset loans are both performing well. Bond spreads for six major office REITs have been steadily decreasing since early 2022 when the Federal Reserve began raising interest rates. Boston Properties Inc. has seen its five-year bond spreads compress in January, and the S&P 500 and Dow Jones Industrial Average have both climbed to record levels. REITs have issued $5.8 billion in corporate bonds, and Kilroy Realty Corp. recently borrowed $400 million. Bond issuance from office REITs had stalled in the past year, so the strong performance of these bonds is noteworthy. The Dow Jones Equity REIT Index has climbed more than 18.6% in the past three months.



Read more: Landlord debt is rallying — even in the battered office sector