06/10/2014 | by
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Banker Sees IPO Demand for REITs with Large Portfolios

Peter Baccile, global co-head of real estate at UBS, joined REIT.com for a video interview during REITWeek 2014: NAREIT’s Investor Forum, held in New York.

Baccile discussed the market appetite for initial public offerings (IPOs) of REITs, as well as which sectors are seeing the most activity.

“Investor demand for REIT IPOs is very strong, particularly for large portfolios with significant embedded growth. It also helps if the management teams have had experience in the public markets, and I think the Brixmor [Property Group Inc.] (NYSE: BRX) transaction is a good example of that,” Baccile said.

From a sector standpoint, he continued, a lot of activity is occurring in health care and net lease. Going forward, “we also think you’re going to see more activity in lodging and office as well,” Baccile added.

Baccile also commented on trends that are likely to prevail in the second half of the year.

“Activism hasn’t really been a prevalent theme in REITland for the past couple of decades, but of late, it’s becoming more and more present. I think activism is going to be something that we continue to spend time looking at,” Baccile remarked.

Baccile speculated that more shareholder activism could affect the make-up of existing REITs.

“It ought to lead to more consolidation—or at least reconfiguration—of companies through spin–offs and sales and other transactions. So, certainly, we think that’s a place to focus,” he added.