Additionally, a slowdown in private-equity acquisitions in real estate is not likely to devalue the retail sector because established public REITs like Simon Property Group and General Growth Properties are more experienced at running their assets, said John Kris, a Moody's managing director. "They have better systems, better people and a better platform," he said at the event, held at the Ritz Carlton in Downtown Manhattan.
Since 2006 in the US, investors have spent $100 billion on real estate acquisitions, and 80% of those dollars were allocated by private-equity firms, said Seth Weintrob, a managing director at Morgan Stanley Real Estate. "I imagine that's going to slow substantially," he said, prediction a drop off between 50% and 75% next year.
Beeson said the industry will still see sizable deals, mostly in the $500-million to $2-billion because there is "still a lot of capital out there." Investors like pension funds, which don't demand such high returns could step up their activity in the near future.
Speaking earlier, David Rubenstein, cofounder of private-equity firm the Carlyle Group, said the economy has experienced slow period in the M&A climate before, but it never lasts long. "After each pause, the industry emerges stronger than ever before," he said, explaining that it is in a "rest period right now."
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