Lawrence Raiman, founder and CEO of LDR Capital Management, joined REIT.com for a video interview in Chicago at REITWeek'">REITWeek 2013: NAREIT’s Investor Forum.
Raiman offered his take on how the Federal Reserve’s monetary policy has affected the REIT capital markets.
“Monetary easing has caused a considerable decline in cost of capital for REITs across each and every property type across all of the regions,” he said. “Both debt costs, preferred capital cost as well as equity capital costs, have declined, which has enabled fluidity of capital into the company to grow their businesses.”
Raiman also discussed the future of REIT mergers and acquisitions. He said certain property sectors, such as the regional mall sector, have “consolidated down to a fabulous degree already.”
Raiman added that there are other property types that could be in line for significant consolidation activity, such as the net lease and suburban office areas, where there may be the opportunity for more mergers and acquisitions.
Additionally, he discussed the pipeline for REIT initial public offerings and said he anticipates that a number of private companies will look to become public in the near future.
“A lot of the peripheral real estate categories are seeing migration into the REIT space, both from existing public companies and private companies, but we will likely see some initial public offerings of private enterprises turning themselves public into a REIT format as well,” Raiman said.