08/04/2016 | by
Allen Kenney

“The game changes dramatically” once rates start to rise, according to real estate transactions specialist.


In the latest episode of The REIT Report: NAREIT's Weekly Podcast, Gil Menna, partner with Goodwin LLC, shared his thoughts on the high volume of REIT IPOs taking place globally in 2016.

Menna attributed the IPO surge to low interest rates around the world.

"You're getting a current, ongoing yield [from real estate]," Menna said, "and I think that is what is driving the interest globally."

Conversely, the real estate IPO market in the United States has stagnated so far in 2016, with just one IPO coming to fruition during the year. Menna said he expects the lack of activity to be "temporal," in light of rates on the 10-year Treasury.

"If that dynamic persists, I think it bodes well for the REIT new issues market" in the U.S. for the rest of 2016 and into 2017, he said. "The game changes dramatically if, in fact, we see… a spike in interest rates."

Regarding the outlook for global real estate IPOs, Menna projected that activity would remain high for the rest of the year. He singled out Asia and South America as potential areas of interest.

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