Three of the largest private equity firms in the country
have included non-listed real estate investment trusts in their
partnerships. The purpose of these
mergers are so they can go public and begin to sell shares on the open market
as they near the time when they are obligated to pay out dividends to their
is usually advertised by brokers to investors and is not traded on the
exchange. Mark Decker, head of real estate investment
and corporate banking at BMO Capital Markets says they
usually have a life span of about 5 – 10 years and then thy have to begin looking
for an exit strategy.
Real Estate Group of Cos in Oakbrook, which has $10.8 billion in assets, is one
of those trusts that have reached that point.
Daniel Goodwin, CEO of the group says, “All indications are that
investment bankers will be very busy.
There will be mergers and acquisitions, there will be IPOs, and there
will be secondary offerings.”
aren’t the only ones. Others include, American Realty Capital Properties Inc, Cole Credit Property
Trust II Inc, Apple REIT Six Inc, Spirit Realty Capital Inc, and more have entered into
mergers, buy outs and other forms of grouping capital in order to facilitate
A.J. Agarwal, a senior director with Blackstone Group LP, says that REIT’s are always looking for ways to
give money back their shareholders. This
is an industry that last year alone transacted $10.5 billion, which is the highest since 2007, according to
Blue Vault Partners LLC, an industry tracking firm.