06/18/2013 | by
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Investment Banker Anticipates Uptick in REIT M&A Activity

Mark Decker Sr., managing director with BMO Capital Markets, joined REIT.com for a video interview in Chicago at REITweek 2013: NAREIT’s Investor Forum.

Decker spoke about REIT mergers and acquisitions and IPO activity, as well as founding REITWeek 20 years ago when he was head of NAREIT.

While the market was much more active prior to the 2008 downturn, Decker said he anticipates an uptick in M&A activity.

“I think we’re starting to see quite a bit of activity now. Mergers are typically synergy-related and require more than stock price valuation differences. But, as the market normalizes a little bit, I think we’ll see more. We’re on track this year for seven or so, which is a little higher than average,” he said.

As far as IPO activity, Decker said that unlike the M&A activity, the IPO market has stayed consistent in the last 10 years, even in spite of the 2008 crash.

“We are seeing some farmland and agricultural kind of REITs. I think we’ll see more infrastructure opportunities for the public REIT market and private REIT market,” Decker said. “The core REITs, where we’re well-populated in the industry by companies that are well-run, are difficult. But some of the new niches and new ideas, I think, show good signs.”

Decker explained that he believes REITs remain in the earlier stages of the evolution of public markets. He added that he anticipates increased activity over the next decade.

“It’s still a small business relative to the broader real estate market,” he said.

Decker said REITWeek, which began 20 years ago as the “Real Estate Forum,” has served as an opportunity to give REITs the chance to tell their stories to investors.

“I think, since then, this industry event has become really important. It’s really been important that NAREIT’s be the leader and has stayed the leader,” he said.