The Real Deal Miami

REIT deals on the decline

February 03, 2010 10:56AM

While many had hoped that the glut of distressed commercial properties could translate into prime opportunities for real estate investment trusts, experts say that the number of deals being made is actually on the decline, even among those REITs laden with cash. This is due, in part, to property owners’ reluctance to sell off their better assets — especially in a market in which commercial property prices are 35 percent down from their peak. While REITs sold off around $24 billion in new stock in 2009, according to the Wall Street Journal, they only purchased around $6.4 billion in property, marking a 67 percent decline from the previous year’s figure. Stephen Richter, CFO with Weingarten Realty Investors, said that deals are hard to peg. “Today I’m sitting with $125 million in cash that I can’t find investment for,” Richter said. “If I would have known the markets are where they are today, I certainly wouldn’t have sold a third of the company.”