Robin Panovka, partner at Wachtel, Lipton, Rosen & Katz, participated in a video interview during Nareit’s REITWISE: 2024 Law, Accounting & Finance Conference, held March 19-21 in Hollywood, Florida.
Focusing on the mergers and acquisitions (M&A) landscape for REITs this year, Panovka expressed cautious optimism, highlighting the unpredictability surrounding the market’s trajectory. “Last year was surprisingly strong… but about half (the level) of 2022.” Discussion revolved around whether 2024 would resemble the boom of 2022 or the recession experienced in 2023, with the consensus being somewhere in the middle. Panovka identified two key factors driving this uncertainty: interest rates and the bid-ask gap between buyers and sellers.
Regarding a potential surge in deals, Panovka emphasized the role of interest rates, saying, “If interest rates continue to soften, I think you’ll see private equity back in the game.” He underlined how the absence of private equity in 2023 due to high capital costs hindered deal flow. Additionally, he addressed the prevalence of activist activities within the REIT sector, moving away from the traditional narrative of selling assets for profit.
Looking ahead, Panovka predicts three key themes for REIT M&A in 2024: continued consolidation driven by scale advantages; Increase in stock-for-stock deals; and the resurgence of private equity participation.
