Cheap REITs Mean More Public-To-Private Transactions To Come

Hans Nordby

NEW YORK CITY–Yesterday Blackstone Real Estate Partners VIII announced it had agreed to acquire Gramercy Property Trust for $7.6 billion in cash. This was, of course, a story about the vibrancy of the industrial real estate sector, especially as it followed by mere days Prologis’ proposed acquisition of rival industrial REIT DCT Industrial Trust for $8.4 billion in stock.

But the Blackstone-Gramercy transaction is also a story about how cheap REITs have gotten, compared with private sector real estate. “We have been telling clients this for some time now and we’re also doing analysis for clients on which REITs to take private because they are too cheap,” Hans Nordby, managing director of CoStar Portfolio Strategy, tells GlobeSt.com.