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REIT Deals Expected to Rise in 2013

12/18/2012 | By Allen Kenney

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."

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