Horowitz was asked about the number of initial public offerings (IPOs) held in the REIT market in 2013.
“If we were sitting here a year ago, we knew a few things,” he said. “First of all, REIT IPOs don’t happen overnight, so we had an active pipeline and a shadow pipeline. From a demand perspective, we knew that certain things were very positive for us. REITs had performed very well for a number of years, so valuations were pretty good. Funds flow was very robust. And we had a lot of new investors joining the sector.”
Horowitz talked about the IPO market from the supply side as well.
“From a supply perspective, we also had a number of good things going on,” he said. “First of all, we had a lot of niche sectors that were about to grow and expand. We also had situations, like roll-ups, that were taking place for a long period of time. And we also had companies that went private in [2006 and 2007] or during the downturn. We knew all those companies were out there and about to come out. Fortunately, the stocks have performed well, so that has been a very positive outlook for us and will continue to be. One thing that is not in the numbers but is also significant to talk about is that a lot of the [public, non-listed] REITs listed, so that’s another part of our sector of new companies that exist today that didn’t.”
Horowitz also discussed the outlook for more IPO activity.
“I’ve been saying for a number of years that we’re basically in a bit of a mature sector,” he said. “Every year, we’ll see a handful of IPOs, we’ll see some M&A and those sorts of things with certain aberrations. This year, the pipeline is much smaller. On the flip side, if we see some things, there’s a market that is wide open for it. Companies just have to be able to hit certain criteria.”