REIT IPOs – Déjà vu All Over Again

Originally published December 10, 2009

Keywords: REIT, IPOs, real estate, fund sponsors, institutional private real estate funds

Sponsors of institutional private real estate funds have had difficulties accessing new equity during the past year. In fact, the second quarter of 2009 saw the lowest amount of equity capital raised by private real estate funds in any quarter since 2004. By contrast, public REITs have had great success in issuing their shares, having generated gross proceeds of almost $23 billion in new equity during 2009, the largest amount of equity capital raised in a single year since 1997. The ability to raise capital publicly, coupled with the current depressed prices of real estate and the looming maturities of debt secured by real estate, have real estate fund sponsors and real estate operators thinking about going public. The conditions are reminiscent of the conditions prevalent during the early 1990s, during which real estate sponsors