Public-to-private deals could shrink REIT landscape
Large REIT transactions over the past cycle haven’t been deemed successful by the public market, but analysts said some hotel REITs could be bought through public-to-private transactions in the next year or so.
There could be fewer hotel real estate investment trusts in the next year or so, and public-to-private transactions are more likely than public-to-public transactions in the current environment, sources said.
REPORT FROM THE U.S. - There could be fewer hotel real estate investment trusts in the next year or so, and public-to-private transactions are more likely than public-to-public transactions in the current environment, sources said.
Michael Bellisario, director of equity research and senior analyst at Baird, said many investors believe there are too many hotel REITs and that consolidation is a good thing at all points of a cycle.
In this last cycle, the industry has seen three public-to-public REIT transactions: FelCor Lodging Trust and RLJ Lodging Trust; Park Hotels & Resorts and Chesapeake Lodging Trust; and Pebblebrook Hotel Trust and LaSalle Hotel Properties. The public market has not been receptive to those deals, he said.