Merger and acquisition activity among the real estate investment trusts have been the subject of industry gossip for some time now, but 2007 has already been one of the more spectacular years for deals.
Retail REITs Federal Realty Trust, Kite Realty Group, and Ramco-Gershenson Properties Trust are all appealing take-down candidates, for their development and redevelopment potential and geographic dominance, according to analysts.
But activity isn’t only at the high-performing end of the sector, as evidenced by the recent sale of The Mills Corp. Simon Property Group took over the flailing mall REIT for $7.9 billion after a brief bidding war with Brookfield Asset Management. Though Brookfield owns a substantial office portfolio, it doesn’t own any retail space.
The office sector saw its own major M&A deal, when The Blackstone Group took the country’s largest REIT, Equity Office Properties Trust, private in a nearly $40 billion deal. Private equity has yet to hit the retail REIT segment, but the year is still young.
For a detailed look at the headlines discussed above, see the following archived articles:
Dec. 4, 2006
“REITS Ripe for Takeover in 2007”
“Equity Office Board Backs Blackstone in REIT Deal”
“Simon Property Group Jumps Into Mix With Bid for Mills Corp.”