Last year was one of plenty for dealmakers across rthe nation. Despite some reports, leasing activity was teady in many markets, spurred by the tech and
pharmaceutical/biomedical fields. Financing was going at a
full clip as borrowers sought to take advantage of interest
rates before they started rising. Several markets across the
country welcomed new developments across the property
spectrum. And the $562.1 billion in investment transactions recorded by Real Capital Analytics marked a 15%
jump from the prior year. Meanwhile, prices rose by some
6% across the board.
Of course, much of that was due to the M&A activity the
industry saw as private equity players took advantage of public market pricing to grow their holdings. We take a look at
these entity-level deals below, followed by our annual rundown of some of the most significant transactions that took
place throughout the country last year.
2018 was a high water mark for real estate merger and
acquisition activity. By SNL’s reckoning there were 22 M&A
transactions announced of firms that the company covered.
Those deals aggregated $90.55 billion in deal value and were
up 154.7% compared to the $35.55 billion over 18 M&A
deals announced in 2017.
Many of these transactions stand out because of their mas-
sive scale. For example, the top two transactions were by
Brookfield Asset Management when it acquired two REITs in
separate deals: GGP in a $15 billion takeover and Forest City
Realty Trust in a $11.4 billion transaction (see sidebar).
Another deal that rivaled the heft of Brookfield’s GGP trans-
action was Unibail-Rodamco’s $15.7 billion takeover of
Westfield Corp. After multiple approvals, the two companies
declared that the cash-and-stock deal, which was first announced
the previous December, would create “the world’s premier
developer and operator of flagship shopping destinations.”
W. P. Carey’s merger with one of its managed funds,
CPA: 17, is another example of a scale-driven transaction,
with the resulting company positioned as one of the largest
net lease REITs and among the top 25 publicly traded REITs
in the MSCI US REIT Index. So, too was the merger of
Phillips Edison & Co., one of the nation’s largest grocery-
anchored center landlords, with Phillips Edison Grocery
Center REIT II. The merger created a $6.3B REIT that oper-
ates 323 shopping centers across 36. 7 million sf nationally.