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We can rest assured that we won’t see the likes of the $39-billion Blackstone/EOP merger any time soon. But you can bet with equal confidence that there are more public-to-private deals to come; the conditions are still too ripe to avoid them. In the past few weeks alone, CNL Hotels stockholders ok’d their buyout by a Morgan Stanley fund; JP Morgan was recorded negotiating to take Columbia Equity Trust and Apollo nailed Realogy . Of course, at some point the pendulum will return. When, of course, is the question. Admittedly, it even puzzles John Haggerty, a partner in the Boston-based law firm Goodwin Procter LLP who focuses on M&As and real estate securities representation. But he was willing, in a recent, exclusive interview, to make a few highly educated guesses:

GlobeSt.com: So, when will the trend reverse?

Haggerty: Everybody is trying to predict what the trends will be over the next couple of years, but of course no one is entirely sure. You’ll see some companies go public, but for the next year or year and a half, you’ll still have more companies going private than going public. You still have an imbalance in pricing between public and private. Public companies are trading at a discount to NAV and the private market is making more use of the very frothy debt markets right now. So the trends will still favor more going-privates than going-publics. There are still reasons for people to go public and the balance is going to shift at some point. But it’s hard really to say how long.

GlobeSt.com: Your time frame surprises me. It seems along way out.

Haggerty: Maybe I’m being optimistic because of what I do, but so much is driven by the debt markets. People are talking about interest rates, but I don’t see them going up so much in the near future. Take the recent troubles that have emerged in the subprime mortgage market. There was speculation that it would infect commercial lenders in big deals like these and that they’d be pulling back and taking less credit risk. No one has seen that happen. If something like that isn’t going to trigger a reversal. . . .

The other dynamic that’s driving the trend of course is that there is a lot of private money out there, a lot of pension funds and institutional investors investing in private real estate funds. All this private-side capital is looking for a place to land. Over the past five years the growth in the number of funds and the amounts they are raising has been just incredible. Until the public markets start trading higher so that the public REITs have a cost of capital that’s lower, the imbalance will favor going private. But don’t get me wrong. I don’t think it’s completely one way, and as I said, you will see people going public.

GlobeSt.com: For what reasons?

Haggerty: There’s always the classic liquidity exit for a private developer.

GlobeSt.com: Cashing out.

Haggerty: Yes, cashing out or diversifying their assets. One of the classic models for going public is a family business that’s been around for a long time that’s decided it’s time to cash some of it out or diversify some of it to get a big influx of capital. I’m not sure this is a near-term thing, but this privatization trend is going to turn full circle because you’re going to have so much real estate in big portfolios. Think about how much Blackstone has been buying up. At some point they’re going to need to trade those portfolios. But funds have limited lives, six or seven years, and they’re often trying to return money to investors before that. It won’t be easy to sell off those assets. When it’s time for an owner to get out and he has a big portfolio in the private market, he’ll either have to find other fund sponsors to buy it or go public. When it’s time to flip these assets there may not be many other options than going public–in particular if the debt market shifts. At some point all of these portfolios will get packaged up and go public.

GlobeSt.com: Let’s look at the debt market. Are lenders too lax?

Haggerty: I’m an M&A lawyer and don’t pretend to be a lender. But we’re in a frothy period of time and when things come down–and they will come down–people will look back and some will say some of these loans were too lax. I just heard a survey quoted in which lenders said that underwriting standards were getting too lax, but not their underwriting standards, everyone else’s. The other fascinating dynamic of the past few years is the development of the CMBS and CDO market and the ability to securitize debt. The good thing there is that it allows for more risk. The bad thing, one could argue, is that the incentives are wrong in the sense that the person sourcing the debt sells it off. It encourages people to take too much risk. There’s going to be a pullback, at some point, a tightening of credit.

GlobeSt.com: Is it a dangerously frothy time?

Haggerty: Again, maybe it’s my optimism, but we haven’t repealed the business cycle. It’s going to come down. I don’t think we’re so insanely out of control that we’ll return to the depths of 1990. But we will take a downturn at some point. Everyone talks about the secular-or-cyclical debate–whether we’re in a cycle or if there have been secular shifts that have fundamentally changed the market. Well, there have been shifts, since the late ’80s and early ’90s, in the way real estate is financed and run and owned. And those shifts will moderate those cycles. But the cycles are still there. It’s in the nature of markets to get frothy and correct a little.

GlobeSt.com: So have we peaked?

Haggerty: It’s tough to say. I’ll dodge your question a little and say there’s a growing sense of caution. There are enough people around who remember the early ’90s. The problem with identifying the peak is that you never really know until you know in retrospect. To be honest, I worried that we had peaked, and then we clearly hadn’t. So, we’ve got to be getting near a peak. Have we passed it with the EOP deal or if it will be this spring, is not entirely clear to me. I see both optimism and caution out there. But this can’t go on forever.

GlobeSt.com: So, a year from now?

Haggerty: A year from now we’ll probably look about the same. There are two variables. First is if we see a rise in rates. Second is if there’s a high-profile deal that doesn’t get done because of financing or a deal that has to be delayed significantly and has a little ugliness because they just pushed too far and overleveraged. That will scare enough people into slowing down a little.

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