There has been a growing concern through the investment banking community over the real estate market recovery, but many bankers seem to think that there should continue to be a market recovery in 2018 as GDP continues its modest growth at 2 percent.
M&A has been fairly consistent over the last couple of years and it should continue to see a smaller amount of deals. There may be an increase in deal volume only in only in specific circumstances. At the sector level, there has been certain private health care players under margin pressure, which has increased the number of REITs actively acquiring assets on the private side. Medical offices should continue to be active and stay a fragmented sector, and there will be a continuation of hospital systems and private-side owners of office assets that will continue to test the waters as potential sellers of real estate.
2016 had two notable deals: The first was Annaly Capital Management, Inc. acquiring Hatteras Financial Corp. for $12.5 billion and the second was NorthStar Asset Management Group, Inc. acquiring NorthStar Realty Finance Corp. for $12.1 billion.
2017 had two notable deals: The first was Invitation Homes, Inc. acquiring Stanwood Waypoint Homes for $4.6 billion, and the second was Digital Realty Trust Inc. acquiring DuPont Fabros Technology, Inc. for $7.6 billion.
Major Buyers and Trends
Most of the real estate M&A transactions that have happened appear to spread out among firms but some of more noticeable buyers seem to be Brookfield Asset Management, Inc., Ventas Inc., The Blackstone Group LP, and NorthStar Asset Management Group, Inc. Brookfield Asset Management, Inc. seemed to make acquisitions that focused in apartments and retail. Ventas seemed to make acquisitions mostly related to healthcare. Blackstone Group LP seemed to make acquisitions related to healthcare, and lodging. NorthStar Asset Management Group, Inc. seemed to make acquisitions pertaining to the industrial, healthcare, and hospitality sectors. From looking at these noticeable buyers we can see that there were acquisitions in all sectors of the REIT industry.
List of Transactions (5 years)
Charlie Izaguirre contributed to this report. For a detailed list of sources, click here.