Daniel LeBey, partner, capital markets and M&A at Vinson & Elkins LLP, participated in a video interview at REITwise 2018, Nareit’s Law, Accounting & Finance Conference in Hollywood, Florida.
LeBey observed that activity in the REIT initial public offering (IPO) market - and capital markets in general - has been slow, mainly due to the interest rate environment.
“We’ve been through this cycle before and history shows that this doesn’t last forever,” LeBey said. “I feel decent about the outlook for the latter part of 2018,” he added.
LeBey explained that while he does see some pent-up demand, “I think it’s going to be challenging to get IPOs done in the REIT space, even when things stabilize, unless certain conditions are satisfied generally.” He stressed that to be successful, companies coming to the market need to offer something new. That could be in the form of a new asset class or a traditional asset class offering a new strategy, he explained.
Looking ahead, LeBey said he expects to see more mergers and acquisitions activity this year among retail REITs as well as other sectors of the REIT industry.