Well, there are some stalwarts out there who cling to the hope that the high-flying numbers recorded in take-private acquisitions will continue. In fact, the majority of respondents to last week’s poll–56%–say the trend still has gas, while only 44% think that time has run out. Commentator Costello, E&Y’s New York City-based real estate advisory services practice leader, falls into the latter category. Here’s why:

“You had all of this cheap money floating around, and it provided a great opportunity for people to cash out–just look at Sam Zell–based on where they were in their life and career. That cheap money and the prices being paid were so compelling that it created all of this activity.

“It was particularly attractive to smaller companies that felt the pitfalls and burdens of being public. The compliance, the scrutiny, the analyst calls, the audit-committee matters. At some point in time, the burdens begin to seem out of proportion, especially if you’re not generating enough return.

“Now the spigot’s off and you’ll see little or no activity until there’s a more favorable climate. The market is going through a correction. The credit crunch exposed some underlying flaws in terms of the value of the financial instruments supporting debt. That’s given the market a reason to pause, to reassess and to correct, and it’s a good thing, by the way. There’s a lot more prudence in the marketplace today, and that’ll make for better and more sustainable decisions.

“In terms of the pendulum swinging back, I’m not so sure we’ll see more private-to-publics this time next year. It all depends on if the correction is short-term and confidence is instilled back into the marketplace. You might see some of that, but I tend to think that you’ll see constancy in the market for the next year or so. My assessment is that things will be status quo through most of 2008.”

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