Ever since the introduction of modern REIT-enabling legislationin the US in 1960, public ownership of commercial real estate hasgone through a series of growth spurts, often followed by slightcontractions as real estate owners followed the ebb and flow of thecapital markets.
The last major growth spurt for REITs was in the 1990s whenaccess to private capital was limited and the public equity marketsprovided a greater opportunity for real estate owners to accesscapital to expand their businesses. Today, similar conditions existin the real estate capital markets and it appears we may be on thecusp of another era of great REIT formation.
In March of 2009 Simon Property Group succeeded in selling 17million of its shares at $31.50 a share despite a severe creditcrunch and a deep recession. Simon’s offering helped to buildconfidence that the REIT sector could raise capital and thus pavedthe way for more REIT IPOs. In total, there were nine other REITIPOs totaling about $3 billion in 2009. This year, six IPOstotaling about $1.16 billion had been completed as of mid July,including Hudson Pacific Properties’ successful $218 million IPO.Some offerings have been structured as blind pools, with sponsorsplanning to invest the proceeds in distressed real estate or otherassets. Others have been structured as rollups, with a sponsorrolling up assets into an operating partnership owned by a REIT andtaking the REIT public in an IPO.
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Howard Roth
As the Global Real Estate Leader, Howard coordinates the firm's activities across a broad array of related services around the world. EY has the largest integrated real estate practice of any Big Four firm, with more than 7,500 professionals around the world providing audit, tax, transaction and advisory services to owners, builders, lenders and users of real estate. EY serves more than 4,000 real estate clients throughout the world. Howard brings more than three decades of experience in the real estate industry. He has worked extensively with major real estate private equity funds, domestic and offshore real estate investment trusts and large public homebuilders, as well as numerous construction and hospitality companies. His credentials include a BA in Accounting from Hofstra University. He is a member of the American Institute of Certified Public Accountants and New York, New Jersey and Connecticut Society of CPAs, has been a columnist for several major industry publications and is frequently a speaker at key real estate industry events.
