Real estate company mergers are exploding this year

So far, m&a deals have totaled $29.9B

Digital Realty's A. William Stein and Tom Barrack (Credit: Getty Images)
Digital Realty's A. William Stein and Tom Barrack (Credit: Getty Images)

It’s been a big year so far for mergers and acquisitions of real estate companies, with a volume of $29.9 billion worth in the first half of 2017.

Most of that activity came from the $19.9 billion merger of Colony Capital, NorthStar Realty Finance and NorthStar Asset Management, Real Estate Alert reported. After changing its name to Colony NorthStar, NorthStar Asset Management acquired NorthStar Realty for $12.4 billion. Real estate investment trust Colony NorthStar then scooped up Colony Capital for $6.7 billion.

Before the end of the year, another $19.1 billion in mergers and acquisitions are expected to close. The largest of the 11 announced deals is Digital Realty’s $7.6 billion acquisition of Dupont Fabros.

Sign Up for the undefined Newsletter

By signing up, you agree to TheRealDeal Terms of Use and acknowledge the data practices in our Privacy Policy.

The annual average number of mergers and acquisitions between 1996 and 2017 was 21, totaling $36.7 billion. At the 2007 peak, that volume swelled to $168.4 billion. In 2009, it was only $758 million. The M&A market is now on the upswing and is on track to exceed last year’s volume of $36.3 billion.

“You’ve got a confluence of different events,” Andy Jonas, Goldman Sachs’ co-head of real estate investment banking, told Real Estate Alert. “More people have a better understanding of the risks and the stability of owning real estate, there’s a low interest-rate environment, and there is a lot of equity capital and debt capital. Those things should make for greater volumes.” [REA] — Kathryn Brenzel