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After a Lean Year for REIT M&As, 2017 Talk Turns Private

February 17, 2017

After a Lean Year for REIT M&As, 2017 Talk Turns Private

February 9, 2017 | by  | National Real Estate Investor

At this time of year commercial real estate executives and investment funds usually look back at how the REIT sector fared in terms of mergers and acquisitions. The outcome in 2016 was mixed, and fell short of generating excitement among shareholders and profitable outcomes for companies.

Regency Centers and Equity One announced a deal worth $12 billion that is expected to create the largest REIT in the grocery-anchored shopping center space when it closes later this year. The proposed transaction between The JBG Companies, which develops several property types, including mixed-use retail, and New York REIT, based in New York City, would have created an $8.4 billion REIT. New York REIT’s investors, however, clearly preferred a liquidation of assets to generate near-term cash and firmly resisted consolidation, so the companies mutually decided to terminate the combination.

REIT merger data is fragmented, but REIT mergers and acquisitions in the U.S. and Canada amounted to about $16.4 billion in 2016, according to SNL data provided to NREI. Activity was subdued across all commercial real estate sectors last year, according to industry observers. Even sales of individual properties had declined in 2016.

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