WASHINGTON, DC–REIT joint ventures have been steadily rising for the last two years. In 2015, according to Real Capital Analytics, the dollar volume of such transactions rose by 50% compared to 2014. When the numbers are crunched for 2016, there is likely to be a similar increase given the ripe conditions for these partnerships.
But 2017 may well be the year when REIT JVs become one of the main go-to sources of capital for developers. GlobeSt.com sat down with David Kessler, national director of the Commercial Real Estate Industry Practice at CohnReznick, and Howard Barash, a principal at the CohnReznick Advisory Group, to talk about why.
GlobeSt.com: Why JVs at all for REITs? Why not just buy or build on their own?
Kessler: Because that is one of the best ways for them to get access to core deals at the lowest basis. And I think developers are going to struggle with other sources to fill their capital needs this year. That is not to say capital will dry up for developers, but I do believe that the demand will be greater than the availability for many companies.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
