As we move toward the midpoint of 2021, much of the REIT industry has begun to shift from resilience to resurgence. The continued rollout of effective vaccines and ongoing positive health trends related to COVID-19 are bringing more employees back to the office and encouraging consumers to travel, shop, and get to back to many of the ways they utilized REIT-owned real estate before the pandemic.
In this issue of REIT magazine, a panel of five leading economists discuss their expectations for the broader economic recovery and how that will impact the commercial real estate industry. In the same way that individual sectors and regions were affected differently throughout the past year, so too will there be variations in the path of the recovery.
As Penn State University’s Eva Steiner says, “In the short run, there’s a bifurcation where some property types have healthy fundamentals and others that rely heavily on in-person interaction are struggling. In the long run, the pandemic is an anomaly, and properties whose values currently may seem depressed are likely to regain their potential once the restrictions can be safely lifted.”
As the economy stabilizes and investors gain insight into the pace of recovery, real estate professionals expect to see an uptick in REIT transaction activity in the second half of 2021. In the feature “On the Move,” several real estate investment professionals discuss their outlook for mergers and acquisitions, privatizations, and initial public offerings in the REIT space for the remainder of the year.
To that point, shortly before this issue went to press Kimco Realty Corp. (NYSE: KIM) announced it was acquiring shopping center REIT peer Weingarten Realty Investors (NYSE: WRI), Realty Income Corp. (NYSE: O) said it had agreed to acquire VEREIT, Inc. (NYSE: VER), and Equity Commonwealth (NYSE: EQC) agreed to buy Monmouth Real Estate Investment Corp. (NYSE: MNR). Each of these M&A transactions reflect longtime REITs looking to combine portfolios and grow their scale to take better advantage of strategic opportunities and prepare for future growth.
Speaking of seizing opportunities, I want to make sure you read our interview with business titan Robert L. Johnson, founder and chairman of The RLJ Companies, LLC, and the founder of Black Entertainment Television (BET). Johnson, who notably became the largest Black hotel owner when he and Thomas Baltimore founded what became lodging REIT RLJ Lodging Trust (NYSE: RLJ), discusses the origins of his success, the impetus behind his business strategy, and how corporate America needs to tackle systemic racism. Within the article you can also find links to the full audio interview and video excerpts from our discussion.
Editor in Chief