Daniel Ismail, co-head of strategic research at Green Street, joined the REIT Report to discuss recent REIT M&A activity and its implications for the sector.
REIT M&A activity has been lively in 2025, with the pace expected to continue into 2026, especially if interest rates decline, Ismail said. At the same time, however, the size of transactions is about 80% smaller than over the past decade, he added.
Deals announced this month include the acquisition of Sotherly Hotels Inc. (Nasdaq: SOHO) by a joint venture backed by Kemmons Wilson Hospitality Partners and Ascendant Capital Partners, and the acquisition of Plymouth Industrial REIT, Inc. (NYSE: PLYM) by Makarora Management LP and Ares Alternative Credit funds.
Ismail pointed out that in a typical REIT M&A event, the premium to unaffected share price is about 15%. In the case of Plymouth Industrial, that premium stands at 50%, and jumps to 150% for Sotherly.
One key takeaway from recent activity is that “investors generally feel confident underwriting and owning commercial real estate at today's prices,” Ismail said. “Total transaction volume in U.S. commercial real estate has been recovering in 2025, and you can generally be more confident at where cap rates are in most sectors relative to the past two years, given that increase in activity and clarity in terms of where private market pricing is.”
Ismail also noted that “clearly capital wants to be put back to work in real estate. The debt markets are wide open.” At the same time, there are some compelling reasons to sell today, Ismail said. He pointed out that REITs have been trading below NAV for a few years now, particularly in the apartment and office sectors.