MedEquities Realty Trust, which bought the Southern Indiana Rehab Health Center in New Albany, Indiana, this summertime for $23.4 million, is checking out a prospective merger.Mergers and acquisitions including realty investment trusts are on a record pace this year, with about$ 68 billion in deals announced in the first seven months. That rate reveals no indications of slowing after health care REIT MedEquities Real estate Trust said it’s exploring a possible sale. It wouldn’t be a surprise to see other deals emerge as the year progresses,
stated Calvin Schnure, senior vice president for research study and economic analysis at the National Association of Realty Investment Trusts. The nine merger and acquisition REIT offers this year totaled a little more than $68 billion, inning accordance with NAREIT information. That’s more in 7 months than in any full year returning to 2006 and 2007. One difference this year is the deals are much bigger. Asset supervisor Brookfield’s pending purchase of REIT GGP tops the volume at a value of$
27.1 billion. That would be the second-largest REIT acquisition in history after private equity company Blackstone Group’s $39 billion purchase of Equity Workplace Characteristic in 2007. The other eight deals this year balance a worth of about $4.6 billion. By contrast, there were 39 REIT mergers in 2006, balancing just $2.1 billion.
So while the dollar worth of offers is on a record speed this year, the variety of deals is just reasonably healthy, Schnure explained.
There are numerous typical themes amongst the proposed mergers, though the information vary from deal to deal. One of the driving forces behind
the merger wave in the very first part of the year was the discount at which REIT share prices were trading compared to the worth of the homes they hold, Schnure stated. The more recent deals this summer have actually been motivated by the strength of the home sector, he stated, and the billions of dollars in private equity capital chasing residential or commercial property portfolios. The current offers include merger activity in 3 of the much better performing residential or commercial property sectors: commercial, consisting of Blackstone Group’s pending$
7.3 billion deal for Gramercy Residential or commercial property Trust; trainee real estate, such as Greystar’s pending$ 4.3 billion deal for Education Real estate Trust; and hotel deals like Blackstone’s still-to-be-approved$ 4.8 billion quote for LaSalle Hotel Properties. Combinations in those residential or commercial property sectors are motivated by the possibilities of robust growth and the desire to construct a stronger platform, Schnure stated. Needs to an offer emerge for MedEquities Realty Trust, it would harken back to inspirations from earlier in the year when low assessments made REITs appealing targets. On MedEquities’ incomes conference call last week, John McRoberts, chairman and chief executive of the REIT, fielded an analyst’s question about whether the REIT’s low stock assessment alters the REIT’s methods
or focus. The company’s stock has been regularly trading at a double-digit discount rate to its home value, the analyst stated.”I can not inform you particularly what the scenario is going to be in a year or so after we deploy our readily available capital,”McRoberts addressed.”We’ll need to wait and see. But as we approach that, we’ll be taking a look at all choices for the company to maximize the value of the shares.”Those options might include any number of things, he added, including a sale of the company, offering parts of the business, or leaving proficient nursing facilities. “We would have to take a look at each of those at that time to see exactly what we believe is the very best tactical relocation for the business at that point in time, “he stated. As of June 30, MedEquities had financial investments of $587.1 million in 33 homes and seven health care-related property financial obligation financial investments.