Flurry of Early M & A Deals Points to Formidable Year for CRE
Bloomberg reports: Optimism has crept back into the commercial real estate market over the past few quarters, but several recent announcements of megadeals and M&A activity have boosted market confidence and solidified sentiment regarding the sector’s momentum. Today, on March 1, 2011, Blackstone Group’s rumored $9.4 billion purchase of Centro Properties Group’s US mall portfolio was formally announced. This came just one day after two multi-billion-dollar healthcare REIT mergers were announced. Ventas Inc will acquire Nationwide Health Properties Inc for $5.7 billion to create the world’s largest healthcare REIT, while Health Care REIT nearly-simultaneously agreed to purchase Genesis HealthCare’s property assets for $2.4 billion. Both deals are pending.
Of all three deals, Real Capital Analytics’ (RCA) managing director Dan Fasulo remarked that they were “…a great signal that liquidity has returned to the commercial real estate space…It will certainly have ripple effects on the entire industry.” Earlier in the year, public warehouse-REITs Prologis and AMB Property Corp announced a mutual merger, which will create a firm worth approximately $46.0 billion in managed or owned assets. Of these recent megadeals, Mr Fasulo admitted he would not be surprised to see 2011 US property acquisitions double the $140.0 billion totaled in 2010.
Deals of the size announced recently, including others such as Google Inc’s acquisition of its Manhattan headquarters for nearly $2.0 billion, are the result of increased confidence among investors and the long-prevailing low interest rate environment. With both elements in place, RCA data indicated that sales of significant office properties more than doubled in 2010, to $42.8 billion.
View the full article on Bloomberg: Flurry of Early M & A Deals Points to Formidable Year for CRE
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Posted by: Nina Turner