07/07/2021 | by Sarah Borchersen-Keto

Real estate deal activity is accelerating in sectors with strong macro tailwinds, along with increased confidence in the public markets toward valuations, according to Tim Bodner, partner and U.S. real estate deals leader at PwC.

Speaking on the REIT Report, Bodner said property sectors including logistics, multifamily, and life science have all seen increased deal flow. Office assets located in technology-oriented cities have also seen increased activity, while the leisure and hospitality sectors have also experienced a rise in transactions.

“There continues to be an incredible amount of capital on the sidelines” on both the debt and equity side, Bodner said. He also pointed to an “incredible amount” of capital being raised by public non-listed REITs, which topped $3 billion in May.

As for clarity regarding real estate values, Bodner said “valuation indications have certainly improved.” The end result, he added, is more confidence in the public markets about where real estate should trade. However, there is still a disconnect between public and private market cap rates, Bodner said. Over time, though, that gap should tighten, he added.

Bodner also commented on broader trends that PwC is watching heading into the second half of 2021. They include: entertainment consumption patterns and the impact on real estate; the continued move to the cloud; travel patterns and the return of business travel; and ongoing changes in the retail sector.