RCA in the commercial property press:

In 2010, REITs Hit Stock Market Cash-Machine Before Heading to CRE Marketplace

Bloomberg reports: According to data from Real Capital Analytics, sales of commercial real estate in the US rose to $36.2 billion over the first half of 2010, a total that was 67 percent higher from one year earlier. A significant and growing share of that total belongs to purchases made by public real estate investment trusts (REITs), according to a recent article on Bloomberg.

Public REITs, which spent most of 2009 lying low and spending the capital they would ordinarily use on acquisitions instead on reducing their debt and issuing dividends, have returned to the marketplace to become some of the most active traders of commercial property in 2010. This, Bloomberg states, is because public REITs have the unique liquidity advantage of being able to turn to the stock exchange when they wish to raise capital – a source that former heavy-hitters such as equity funds and private investment firms are wishing now they could tap. Several public REITs, which according to Bloomberg include UDR, Inc., Duke Realty Corp., and BioMed Realty Trust Inc., have raised billions through stock sales. SNL Financial records show that, “This year’s secondary offerings by property REITs are the third-highest in SNL data going back to 2000.”

The article also demonstrated why those currently flush with capital, as REITs are, would be wise to invest now in commercial real estate assets. Among the reasons provided was the growth in property offerings, as well as the general pickup in the investment market as a whole, which is demonstrated in the provided Real Capital-sourced data.

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Posted by: Nina Turner

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