Although M&A and high property valuations helped to drive transactions to high marks in 2005 and 2006, transactions experienced a rather dramatic decline in 2007, leading to a five-year low in 2009 as companies worked to reduce leverage and short-term debt maturities
Charlottesville, VA (Vocus) June 2, 2010
A recent analysis by SNL Real Estate found that property transactions by publicly traded U.S. equity REITs declined dramatically over the last five years, from 6,351 acquisitions and 2,812 dispositions in 2005 to 360 acquisitions and 994 dispositions in 2009.
The Retail: other sector posted the largest decrease in property acquisitions, from 1,720 in 2005 to 65 in 2009, a 96.2% drop. The Health care sector was also hard hit, with asset acquisitions falling 74.4%, from 402 in 2005 to 103 in 2009. Property disposition for all sectors of the REIT space dropped to only $5 billion in 2009 from a five-year high of more than $88 billion in 2007.
“Although M&A and high property valuations helped to drive transactions to high marks in 2005 and 2006, transactions experienced a rather dramatic decline in 2007, leading to a five-year low in 2009 as companies worked to reduce leverage and short-term debt maturities,” said Jason Lail, senior analyst with SNL Real Estate. “With this focus on improving balance sheet fundamentals, most companies took part in minimal property transactions in 2008 and 2009.”
However, SNL data shows a rise in acquisitions for early 2010. As of April 30, property acquisitions increased 110.5% over the same period in 2009. Equity Residential led U.S. equity REIT property acquirers with more than $770 million spent on asset acquisitions in the first four months of 2010, while Health care REIT Inc. had the largest number of acquisitions at 31. On the other hand, REIT dispositions have been relatively quiet, dropping 72.0% in the first four months of 2010. Developers Diversified Realty Corp. led the U.S. REIT space in dispositions by a wide margin, with more than $455 million in sales through April.
This data is available as part of the SNL Information Service. To find out more, contact sales(at)snl(dot)com or 866.296.3743.
About SNL Real Estate
SNL Real Estate, a division of SNL Financial, is the premier provider of data, news and analytics for global real estate securities in North America, Europe and Asia-Pacific. SNL collects, standardizes and disseminates all relevant corporate, financial and market data — plus news and analysis — for real estate securities around the world. Other business sectors covered by parent company SNL Financial include Banking, Financial Services, Insurance, Energy and Media & Communications. For more information, visit http://www.SNL.com.
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