Michael Coster, head of U.S. real estate investment banking and M&A at TD Securities, participated in a video interview at Nareit’s REITweek: 2023 Investor Conference, held in New York June 6-8.
Coster said the state of the capital markets today is “still a little choppy,” but that TD Securities sees improvement both on the debt and equity capital market sides.
“We’re certainly not back to 2001 type of numbers, but we do see more issuance and a little more stability,” he added.
Coster also said that since the real estate market is looking for signs of stability, investors are in turn looking for REITs to conservatively manage their balance sheets, both on an equity and a debt basis.
“But they’re also looking to see where future growth opportunities can come from,” he said. “So I think it is also a sector-by-sector decision.”
Coster said that there’s “a constant arbitrage” in terms of cap rates between public and private real estate markets, which is currently in favor of private markets because they are paying better, lower cap rates than the implied market cap rates for public companies.