Morgan Stanley Banker Says Property Values “Healthy”

Seth Weintrob, managing director at Morgan Stanley, joined REIT.com for a video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.

Weintrob commented on the current level of property valuations and the implications for deal-making.

“Property values are definitely healthy. The values of all assets these days are healthy, and in some sense, when you look at U.S. real estate, there’s a little bit of a Goldilocks environment from an investor standpoint,” Weintrob said.

Factors behind the healthy property values include the state of the U.S. economy relative to other international economies, strong property sector fundamentals and expectations that interest rates will remain low for some time, he noted.

“In many respects, we’re actually seeing more interest in real estate despite where valuations are,” according to Weintrob.  “We’re seeing a lot of equity coming in, and the debt markets are better than they’ve ever been. So, in some respects, I expect activity to continue, if not increase,” Weintrob said.

Weintrob also discussed the state of the mergers-and-acquisitions (M&A) landscape heading into 2015.

“Our pipeline is probably as robust as we’ve seen it in a while,” Weintrob said. “It’s actually across a range of different sectors.”

One area where M&A activity is likely to continue is the retail sector, following the planned merger of Washington Prime Group Inc. (NYSE:  WPG) and Glimcher Realty Trust (NYSE:GRT), Weintrob noted.

“Retailers continue to evolve in terms of managing the impact of e-commerce and a different sales environment from what we’ve seen in a while. I actually think that will drive continued consolidation (in retail), but, more broadly, I think we’re seeing it across asset classes,” Weintrob said.