Big real estate investment firms the likes of Blackstone and Starwood are actively buying securities backed by real estate, the financial underpinnings of mall owners like Simon, PREIT, Kimco, and National Retail Properties, said a report in the Wall Street Journal.
Because most commercial property owners are shunning low offers for their properties during the COVID-19 pandemic, acquisitions have slowed in that sector. Public markets are shying away from plowing money into REITS as a result, but investment firms are snapping up the securities as low prices.
Madison International Realty LLC bought tens of millions of dollars of REIT stocks in March and April, when shares of some major REITs were down more than 50%.
Shares of Mack-Cali Realty Corp. fell below $14 in April, and Madison president Ronald Dickerman calculated that the company’s real estate, minus debt, was worth almost twice that. “So we backed up the truck and we bought every share we could find at $14,” he said.
Mack-Cali’s share price is up about 18% from its May low.