Evaluate a REIT’s debt by reconciling what it owes, when principal is due, how much borrowing cost can change with rates, and whether liquidity and covenant capacity can absorb pressure. There is no universal safe debt ratio or maturity schedule: definitions differ between issuers, and the figures below are dated company examples, not sector benchmarks.
1. Define which debt you are measuring
Start with the latest 10-K and 10-Q, debt footnotes, market-risk disclosures, and investor supplement. Record mortgages, unsecured notes, term loans, revolvers, commercial paper, and debt held through unconsolidated joint ventures. Track cash and committed liquidity separately from debt.
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Reconcile principal with balance-sheet carrying value: debt issuance costs can make those figures differ. Also identify whether a company’s total is consolidated, includes its proportionate share of joint-venture debt, or is presented net of cash. These are not interchangeable measures.
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For example, Federal Realty’s March 31, 2026 supplement reports debt net of issuance costs and separately identifies noncontrolling interests and its proportionate share of unconsolidated joint-venture debt. Realty Income’s June 30, 2026 table also separates consolidated principal, noncontrolling interests, and proportionate joint-venture debt. Match these scopes before comparing companies: Federal Realty Q1 2026 supplemental data and Realty Income Q2 2026 supplemental data.
2. Map maturities and refinancing concentration
Build a year-by-year schedule showing scheduled amortization, principal due at final maturity, total due, and each year’s share of total debt. Record extension options and their conditions. Scheduled amortization is principal repaid over time; a balloon or bullet is a larger balance due at maturity. An extension may delay that date but does not erase the obligation or guarantee refinancing.
Look for concentrations in individual years and clusters that coincide with development spending, acquisitions, or other funding needs. Check whether the issuer’s schedule assumes extensions are exercised, whether the borrower can exercise them unilaterally, and whether fees or other conditions apply.
Federal Realty’s schedule dated March 31, 2026 showed 24.8% of its debt maturing in 2030 and 19.4% in 2029. The company separately reported scheduled amortization and said its table assumed all extension options were exercised. Those are issuer-specific figures, not a benchmark; the supplement also described extension rights and a later credit-facility amendment, so subsequent events can change the picture.
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3. Assess leverage and debt-service capacity
Use several measures rather than relying on one headline ratio. Debt to assets provides a balance-sheet view; net debt to EBITDA or adjusted EBITDA relates borrowing to operating earnings; secured debt share shows how much debt is backed by pledged property; interest or debt-service coverage indicates the capacity of income to meet financing costs.
Read each issuer’s definition and adjustments. In particular, check whether EBITDA is a non-GAAP measure and how the company treats joint ventures, preferred claims, or other items. Covenant ratios can show contractual headroom, but the threshold is specific to the debt agreement and is not a universal safety limit.
Federal Realty’s March 31, 2026 supplement reported total debt to total assets of 40% against a covenant threshold below 60%; secured debt to assets of 5% against below 40%; consolidated income to annual debt service charge of 4.0x against above 1.5x; and unencumbered assets to unsecured debt of 252% against above 150%. These are its stated definitions and covenant tests for that period, not recommended cutoffs for other REITs.
4. Identify rate exposure after hedges
For each major borrowing, note principal, benchmark, spread, effective rate, maturity, and whether the coupon is fixed or floating. For swaps and caps, record notional amount, hedge type, start and expiry dates, and the portion of the underlying debt covered. A swap may stabilize cash interest for a period, but it does not remove the loan’s maturity or refinancing risk.
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A “fixed-rate” headline does not mean every borrowing cost is permanently fixed. Floating-rate loans, revolver draws, future refinancing, and the dates and terms of derivatives all affect exposure. Compare the hedged balance with the borrowing it is intended to cover and note when the hedge expires.
Federal Realty’s March 2026 disclosures included mortgages and credit facilities priced at SOFR plus a spread. Swaps fixed the rate on $450 million of a $750 million term loan through March 1, 2028. At March 31, 2026, the company classified 76% of its debt as fixed-rate and 24% as variable-rate under its own definitions. Realty Income reported 91.1% of consolidated debt principal as fixed-rate and 8.9% as variable-rate at June 30, 2026. The percentages are dated and issuer-specific; compare only after checking each company’s definitions and whether its measure reflects hedges.
5. Stress-test cash interest and refinancing
A simple first-pass estimate of additional annual cash interest is:
Unhedged floating-rate principal × benchmark-rate change
For a 1-percentage-point benchmark increase, for example, apply 0.01 to the unhedged balance for the period the higher rate is in effect. This is only an approximation: adjust for contractual floors, caps, spreads, hedge coverage, and the time outstanding. Compare your assumptions with the issuer’s own rate-sensitivity disclosure rather than treating the calculation as a forecast.
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Run a separate refinancing scenario for debt coming due. Ask how debt service would change if a loan rolls at a higher all-in rate, lenders advance less against collateral, or refinancing cannot be completed on schedule. A rate shock to current floating debt and a higher rate on future refinanced debt are different exposures.
Federal Realty’s March 2026 schedule identifies SOFR-linked instruments and swap-fixed amounts, showing the kinds of balances and terms needed for a sensitivity calculation. Its exposures should not be applied to another REIT.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.6. Check liquidity, collateral, and market access
Review unrestricted cash, available committed revolver capacity, commercial-paper backup, near-term maturities, covenant restrictions, unencumbered assets, and planned capital needs. Distinguish a committed facility from an assumption that new funding will be available. Reported capacity is not a promise that all funds will remain accessible under every condition.
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7. Compare REITs on a matched basis
Use the same reporting date, debt perimeter, and metric definitions wherever possible. A comparison is misleading if one company’s leverage includes proportionate joint-venture debt while another’s does not, or if fixed-rate shares are defined differently.
| Comparison | What to align |
|---|---|
| Leverage | Debt to assets or net leverage, including the debt scope and denominator definition. |
| Debt structure | Secured versus unsecured borrowings and the share of debt backed by collateral. |
| Rate exposure | Fixed versus variable principal after hedges, with hedge dates and coverage. |
| Maturities | Weighted-average maturity and the share due in each near-term year; note extension assumptions. |
| Cost and sensitivity | Effective borrowing cost and rate sensitivity under stated assumptions. |
| Capacity | Covenant headroom, cash, and committed liquidity as of the same reporting date. |
| Currency | For global issuers, debt currencies and whether they align with cash flows. |
Realty Income’s June 30, 2026 supplement separately reports USD, EUR, and GBP debt exposure, illustrating why currency belongs in the comparison for a global issuer.
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