Menna Says More REIT Privatizations Likely

Gilbert Menna, partner and chair of Goodwin Procter’s real estate capital markets group and co-chair of its REITs practice, joined REIT.com for a video interview at REITWorld 2015: NAREIT’s Annual Convention for All Things REIT at the Wynn Las Vegas.

Menna discussed the pace of REIT privatizations. He noted that while the current rate does not match that seen in the period from 2005 to 2007, it has been supported by a steady flow of private capital.

“Obviously there’s a lot of private capital that’s interested in being efficient, and the privatization of REITs is a great way to buy a portfolio efficiently,” Menna said. He added that once the Federal Reserve moves interest rates, it will create a calmer environment that leads to more transactions.

Although the current privatization wave is smaller than before, the legal issues and some of the substantive issues are still the same, Menna noted.

“The question we have to ask ourselves in the boardroom is that with REIT net asset values (NAVs) as depressed as they are, is now the time to take a company private?” Menna said.

Meanwhile, Menna said the likelihood of more foreign capital investment flowing into U.S. real estate is high.

“I think we’re likely to see more broader-based foreign capital attracted to U.S. real estate,” Menna added.