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Banker Expects REIT IPO Wave to Continue in 2014

12/27/2013 | By Allen Kenney

Schecky Schechner, a managing director with Barclays, joined REIT.com for a video interview at REITWorld 2013: NAREIT’s Annual Convention for All Things REIT at the San Francisco Marriott Marquis.

Schechner discussed the prospects of the momentum behind REIT initial public offerings (IPOs) carrying over into 2014.

“IPOs are a specialized asset class, and investors who make a lot of money in them one year continue to invest in them in the next year,” he said. “If you look back at the class of IPOs from 2013, as investors have made investments in those, they have all made money. So that bodes well for the IPO class of 2014.”

Schechner also discussed the potential for more activity in the market secondary equity offerings by REITs.

“Well, we’ve had, obviously, a pullback in REIT stock prices due to the rise in interest rates and other factors,” he said. “Right now, a lot of the stocks are down. In that environment, it may be somewhat more complicated for REIT investors, but good deals are getting done at decent discounts to the stock prices.”

Schechner talked about sectors that could be ripe for consolidation in ’14, too.

“I think you’re going to see the [public, non-listed] REITs continue to consolidate,” he said. “In the net lease space, obviously, there have been some very sizable deals announced recently.”

Schechner also mentioned the open-air retail subsector as one that could see consolidation. He also pointed out that a number of self-storage companies that are moving towards coming public could be bought by existing publicly traded REITs.

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