Intensifying mergers-and-acquisitions binge is driving shares higher after a sluggish two-year stretch
A bidding war has emerged for LaSalle Hotel Properties, which owns this property, L’Auberge Del Mar, near San Diego, Calif. PHOTO: LASALLE HOTEL PROPERTIES
The mergers-and-acquisition bug has hit the real-estate investment trust industry, the long-anticipated result of the discounts that REIT stocks have been trading at compared with the private-market valuations of their properties.
But the private and public companies that have been in the buying mode haven’t been fixated on the REITs that are trading at the steepest discounts. Rather, in many cases, they are looking for targets that own the kind of property most likely to weather a downturn, well aware that a bull market in commercial real estate is in its ninth year.
In other cases, buyers are simply going after the REITs that are among the leading owners of certain property types, such as skilled nursing facilities. Buyers can do this partly because the world is awash these days in private equity and debt capital.
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