12/18/2014 | By Allen Kenney
David Auerbach, institutional trader with Esposito Securities, looked back at the REIT market in 2014 and ahead to 2015 on the latest edition of the NAREIT Podcast.
With the year coming to a close, Auerbach discussed some of the biggest developments in the REIT market in 2014. He described it as an "exciting year for REIT investors." He said the moves made by The Blackstone Group, including taking multiple real estate portfolios public, took center stage throughout the year.
"I just got the sense that there was so much demand on the sidelines that people were very excited for all of these different deal types coming out there this year," Auerbach said. "It gets you fired up for what's to come next year."
Auerbach also offered his insights regarding the broader implications of the initial public offerings by STORE Capital Corp. (NYSE: STOR) and Paramount Group Inc. (NYSE: PGRE) for the REIT market. He noted that the REIT IPO market was subdued in 2014 until the Paramount and STORE IPOs closed out 2014. That could mean more are to come in 2015.
"With how well these deals were received, I think you're getting the sense that a lot of these [public, non-listed REITs] are lining up to potentially do the same thing next year," Auerbach observed.
Turning to the announcement that real estate would become a headline sector under the Global Industry Classification Standard (GICS), Auerbach explained that REITs would receive more attention from investors and the media in the future. "I think you're going to see a lot more of the talking heads on the CNBCs and Bloombergs and Fox Newses of the world covering the REIT sector," he said.
Regarding stock exchange-listed REITs being taken private, Auerbach said it is a possibility that 2015 could bring more of those deals. He singled out the single-family housing sector as one that may be suited to consolidation.