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Ask Millionacres -- Should I Be Worried When My REITs Take on More Debt?


[Updated: May 20, 2021 ] Jul 09, 2020 by Matt Frankel, CFP

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Q: I just saw that Realty Income (NYSE: O) had filed for more long-term debt ($600 million in 3.25% notes due 2031). I'm still learning about REITs, but should this be a concern for shareholders? To my understanding they were positioned well, and they said the purpose for this additional capital was to pay borrowings, fund potential investments, and general purpose. I don't fully understand a REIT's balance sheet enough to see if this taking on debt is a good thing or if they could've done another route, like temporarily suspend a dividend. -- James

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