{"id":1004119759,"date":"2015-05-20T09:22:34","date_gmt":"2015-05-20T17:22:34","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004119759"},"modified":"2022-12-08T18:26:00","modified_gmt":"2022-12-09T02:26:00","slug":"fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization\/","title":{"rendered":"The Next Wave of REIT Privatization"},"content":{"rendered":"<p><em>By Britton Costa, Director, U.S. REITs, Fitch Ratings\u00a0<a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/09\/Britton-Costa1.jpg\"><img loading=\"lazy\" decoding=\"async\" data-attachment-id=\"1004103898\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/green-may-be-gold-for-u-s-equity-reits\/britton-costa-3\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/09\/Britton-Costa1.jpg\" data-orig-size=\"250,166\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;5.6&quot;,&quot;credit&quot;:&quot;Stefan Falke&quot;,&quot;camera&quot;:&quot;NIKON D3&quot;,&quot;caption&quot;:&quot;Fitch Ratings Portraits June 5th 2004\\n\\nPhoto \\u00a9 Stefan Falke\\nstefanfalke@mac.com\\nwww.stefanfalke.com&quot;,&quot;created_timestamp&quot;:&quot;1401967947&quot;,&quot;copyright&quot;:&quot;Stefan Falke&quot;,&quot;focal_length&quot;:&quot;140&quot;,&quot;iso&quot;:&quot;100&quot;,&quot;shutter_speed&quot;:&quot;0.125&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"Britton Costa\" data-image-description=\"&lt;p&gt;Fitch Ratings Portraits June 5th 2004&lt;\/p&gt;\n&lt;p&gt;Photo \u00a9 Stefan Falke&lt;br \/&gt;\nstefanfalke@mac.com&lt;br \/&gt;\nwww.stefanfalke.com&lt;\/p&gt;\n\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/09\/Britton-Costa1.jpg?w=250\" class=\"alignright size-thumbnail wp-image-1004103898\" alt=\"Britton Costa\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/09\/Britton-Costa1.jpg\" width=\"150\" height=\"150\" \/><\/a><\/em><\/p>\n<p>Recently announced acquisitions of Excel Trust and Associated Estates may be harbingers of the next wave of U.S. REITs going private in a decade.<\/p>\n<p>The last meaningful period of REIT privatizations occurred between 2005 and 2007, when 30 REITs were acquired representing $123 billion of enterprise value. Current market conditions are setting the stage for another round of acquisitions, potentially of a similar magnitude. If the last wave is any barometer, REIT public-to-private transactions could number 30 to 40 in the next few years.<\/p>\n<p>A pre-eminent catalyst for this potential privatization wave is debt and equity capital, both of which are in ample supply, low-cost and less-discerning and looking similar to that preceding the last wave. Since REITs do not need to trade as wide of a discount or have as much growth for returns to pencil out in a low yield world, the number of candidates increases; more capital and more targets should mean more transactions. New players are also joining private equity capital as potential REIT buyers, among them sovereign wealth funds and other long-term equity sources like Chinese insurance companies that could look to REITs as operating platforms for their rapidly expanding U.S. real estate portfolios.<\/p>\n<p>Moreover, REITs may be more willing to entertain offers this time around given the sustained rally in fundamentals, share prices approaching all-time highs and above-average multiples. That is, the longer the rally to-date, the less growth being \u201cleft on the table\u201d. Whether a transaction occurs will come down to the specific facts and circumstances of the company in question. In general, office retail and industrial are three sectors where, on average, companies are trading below consensus NAV.<\/p>\n<p>As to what this means for REIT bondholders, Fitch sees a mixed bag. REIT bondholder implications can include bond tenders, consent payments, and in the most extreme instance, credit downgrades. That said, REIT bonds enjoy some key structural attributes due to covenants in bond indentures. To achieve targeted returns via the use of leverage, private equity firms have little choice other than to negotiate with bondholders to tender for the bonds. These provisions have shielded many REIT bondholders from the fate of fixed-income investors in other corporate sectors<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Britton Costa, Director, U.S. REITs, Fitch Ratings: Recently announced acquisitions of Excel Trust and Associated Estates may be harbingers of the next wave of U.S. REITs going private.<\/p>\n","protected":false},"author":992,"featured_media":1004103898,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1004119759","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The Next Wave of REIT Privatization - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Next Wave of REIT Privatization\" \/>\n<meta property=\"og:description\" content=\"By Britton Costa, Director, U.S. REITs, Fitch Ratings: Recently announced acquisitions of Excel Trust and Associated Estates may be harbingers of the next wave of U.S. REITs going private.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2015-05-20T17:22:34+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T02:26:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/09\/Britton-Costa1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"250\" \/>\n\t<meta property=\"og:image:height\" content=\"166\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Britton Costa\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization\\\/\"},\"author\":{\"name\":\"Britton Costa\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/991ea8106cfe9231ca8c1b78a9e26fe2\"},\"headline\":\"The Next Wave of REIT Privatization\",\"datePublished\":\"2015-05-20T17:22:34+00:00\",\"dateModified\":\"2022-12-09T02:26:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization\\\/\"},\"wordCount\":376,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2014\\\/09\\\/Britton-Costa1.jpg\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/fuse-is-lit-for-next-wave-of-u-s-equity-reit-privatization\\\/\",\"name\":\"The Next Wave of REIT Privatization - 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