Chris Johnston, Americas REIT Leader at EY, participated in a video interview during REITwise 2022: Nareit’s Law, Accounting & Finance Conference held in Orlando, Florida on March 23-25.
Johnston said 2021 was an “absolute blockbuster year” in terms of REIT capital raised.
“Despite the COVID environment, we still saw over $125 billion of new debt and equity raised,” Johnston said, noting the abundance of IPOs, second offerings, and at-the-market offerings. He added that geopolitical headwinds, inflation, and interest rates, however, are now causing some uncertainty that could lead to a slowdown.
Johnston also called out the high amount of M&A in 2021, which included 15 REIT mergers, 75% of which were public-to-public transactions.
“We’re seeing a lot of the old lifecycle, non-traded REITs reach their kind of ‘exit stage,’” he said. “As those [public REITs] are getting to their maturity…we’ll look at those built-in portfolios and seek to have a win-win in M&A.”
He added that $30 billion has been raised for retail capital in the non-traded REIT space.
Johnston also said that EY uses technology to aid its clients in merger integration, appraisals, valuation, and tax modeling.