IPO Market on Hold as Volatility Keeps Companies Sidelined, NYSE Manager Says

Ron Bohlert, managing director of the Global Client Services Group at the New York Stock Exchange, joined REIT.com for a video interview at REITWise 2016: NAREIT’s Law, Accounting and Finance Conference at the Marriott Marquis in Washington, D.C.

Bohlert attributed the recent slowdown in REIT initial public offering (IPO) activity to volatility in the equity markets, triggered in part by the economic situation in China and continued pressure on oil prices.

The uncertainty has kept companies from “getting out on the road and effectively pricing their deals,” according to Bohlert.  Those companies that did get on the road, “found it to be a very difficult environment with institutions and investors looking for pretty steep discounts,” he said.

Bohlert stressed that only a handful of companies can tap the growth capital they need to expand and pay down debt without accessing the IPO market.  “It will be interesting to see the first few (companies) that test the waters and how they fare, because that could be a great barometer for the rest of 2016,” he noted.

Bohlert also said he expects to see continued foreign interest in U.S. real estate markets.

“Real estate assets offer a pretty good level of price transparency and liquidity. If you look at the limited availability of stable assets on a global scale, it’s tough to see this changing any time soon,” he said.

Bohlert noted that the gap in valuations between the public and private markets has made it difficult for public companies to raise capital due to competition from private equity or foreign investors.

“Fortunately, the recent rally in the market has been closing that gap, and could create more opportunities for the public companies to issue equity, and do IPOs,” he said.

Meanwhile, Bohlert said a major renovation project currently underway at the NYSE will result in a more than doubling of existing space to 25,000 square feet of meeting and event space for its listed companies. Completion is expected by early in the first quarter of 2017.