The REIT industry is closing out 2021 in a position of strength, with ample financing available, brisk merger and acquisition activity, high and rising rents, and elevated asset levels, according to Evan Hudson, partner and real estate capital markets legal expert at Stroock.
“The credit markets are incredibly active, they’re liquid, they’re deep,” Hudson said. He noted that in addition to common and preferred equity deals, largely through at-the-market (ATM) offerings, his firm is also seeing a high level of joint venture activity.
Following a productive year for M&A deals in 2021, Hudson expects all property sectors to be active in 2022. “Even though we have price agreement (between buyer and seller) and the price is very high, a lot of deals are still happening.” He stressed that what is new in the current environment is the entrance of “colossal” non-traded REITs with hefty amounts of cash to deploy.
Hudson also commented on how 2021 saw an acceleration of existing consumer-based trends in the market and how broader economic themes are shaping the real estate sector today.