Seth Weintrob, managing director with Morgan Stanley, joined REIT.com for a video interview at REITWorld 2012: NAREIT’s Annual Convention for All Things REIT at the Manchester Grand Hyatt in San Diego.
Weintrob discussed the level of mergers-and-acquisitions activity in 2012 and his outlook for the coming year.
“If you look by historical standards, 2012 was actually a pretty slow year, volume-wise. As we look at our pipeline, we do expect to see that increase going into next year,” Weintrob said. “I think the interesting thing, actually, about 2012 wasn’t so much the amount of volume that we saw, but the different types of deals. It was really a pretty diverse range of types of transactions. You saw REIT-on-REIT mergers. You saw acquisitions. You saw take-private activity.”
Weintrob also noted that the year was marked by cases of shareholder activism and takeover battles.
“We’re seeing a lot of companies with a cost of capital advantage really trying to use that and export that,” he said. That includes international deals, according to Weintrob, which are presenting accretive opportunities.
Weintrob pointed out that “very little” of the transactions have involved distressed assets: “I think we’ve started to see the end of that cycle.”
Weintrob was asked about emerging trends in the upcoming year.
“I think we’re going to continue to see a lot of public companies buying private portfolios, sort of a reversal of the public-to-private activity that we saw in 2005 through 2007, particularly again in those sectors that are trading at big premiums,” Weintrob commented. “I think we’re continuing to see a lot of discussions and activity in terms of international activity and REITs going global. Lastly, I think we’re going to see more merger activity. A lot of the companies got through the downturn and got through the crisis, but you still have a number of companies that are too small to be effectively efficient. I think we’re going to see more situations where one plus one equals a little more than two with the ability to wring out synergies and actually try to achieve better cost of capital.”