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Multiple Capital Sources Available to REITs

11/16/2012 | By Matthew Bechard

Marty Cicco, senior managing director with Evercore Partners, 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.

Evercore is an international investment banking advisory firm founded in 1996. Its clients include multinational corporations, large institutional investors and financial plan sponsors.

Cicco was asked about the attractiveness of the different segments of the capital markets.  He said all avenues of the capital markets have been available to REITs during the course of the last two years.

"The preferred market is obviously healthy, and that market is very attractive. And when companies need equity the market has been very receptive," Cicco said.

Cicco also discussed the pipeline for REIT initial public offerings (IPO). Cicco said that while Archstone Apartments has already filed for an IPO that is expected to be completed by the end of 2013, he predicted that the IPO market will expand in different ways.

"A number of non-traded REITs have been attracted to a liquidity event, and so they have actually become a good source of public IPOs, whether they raise capital or just list their security on the exchanges," Cicco said. "I don't think it will be a significant market, but you always have some private companies that have reasons to go public."

Those reasons include liquifying investments or attracting new capital, according to Cicco.

Cicco was asked about consolidation in the REIT industry. In response, Cicco pointed out that the mall industry has seen more consolidation than other industries and sectors. However, he pointed out that the likelihood of additional mergers and acquisitions for REITs in 2013 is "looking reasonably good."

Cicco added that the dominant trends for the REIT industry in 2013 will most likely center on issues such as M&A activity, as well as succession and management.