Cicco Says Market Still Interested in REIT IPOs
12/03/2013 | by Allen Kenney

Marty Cicco, a senior managing director with Evercore Partners, joined REIT.com for a CEO Spotlight video interview at REITWorld 2013: NAREIT’s Annual Convention for All Things REIT at the San Francisco Marriott Marquis.

Cicco discussed the momentum behind the wave of REIT initial public offerings (IPOs) as 2014 approaches.

"The IPO market continually goes in and out," he said. "At the end of the day, it's not always just the IPO market, it's what product is being brought to the market. For big, liquid companies, there's probably a market out there."

Cicco was asked about IPOs issued by The Blackstone Group in 2013 in which the private equity firm maintained a controlling interest in companies. He noted that the IPO of Brixmor Property Group Inc. (NYSE: BRX) has been well received by the market

"The completion of Brixmor speaks for itself," he said. "The transaction got done and priced in the middle of the range. It traded very well right after the IPO, so that validated the price. It's clear to the market that Blackstone has an 80-plus percent ownership stake in that company. It present a bit of an overhang in the stock, but it's not uncommon in lots of corporate transactions. As far as the governance that Blackstone put forward, I think the market understood it and accepted it. Over time, they will probably exit their position, but I think the market has a feel for what their ownership is. They'll monitor it. I think in the near term, it's a plus to have them have an ownership position in it."

Cicco also provided his analysis of the potential for mergers and acquisition in the REIT market in '14.

"There has certainly been a lot in the net lease sector," he said. "M&A is relatively cyclical. I'd make two or three observations. One, particularly on the net lease side, was really the outgrowth of a number of [public, non-listed] REITs out there that faced a point in their life span where they were forced to list. Candidly, as opposed to listing, merger becomes an opportunity for those companies. Although it amazes me how much money was raised in that sector over the last five to 10 years, you have a lot of assets there that need liquidity and, as part of their charter, had to get liquidity. Candidly, I think that's what spurred the M&A market."