JUNE ISSUE: Pressing ‘Pause’

After a robust 2013, private companies are weighing IPOs in a quieter climate.

After Robust 2013, Private Companies Weigh IPOs in Quieter ClimateIPO

By Paul Rosta, Senior Editor

After a banner 2013, initial public offerings in commercial real estate are taking a breather in the early part of this year. Three IPOs raised $787 million during the first quarter, according to SNL Financial. That is considerably off last year’s pace, when $4.5 billion was raised by more than a dozen real estate IPOs. That reflects the cyclical nature of public offerings in commercial real estate. “The pace today suggests a slowdown, but the pipeline suggests (IPOs are) going to continue,” said Byron Carlock, U.S. real estate practice leader for PricewaterhouseCoopers.

The most recently completed crop of real estate IPOs, though relatively few in number, involves several of the industry’s most powerful firms. Blackstone Group L.P. has been the biggest name and the dominant force in real estate IPOs for the past several quarters, taking two of its hotel companies and a retail real estate affiliate into the public sphere. So far, Hilton Worldwide Holdings Inc. has made the biggest splash, returning to the public market after seven years of private ownership with a $2.3 billion offering. Completed last December, the offering marked the largest ever in the hotel business.

Another Blackstone company, Brixmor Property Group Inc., raised about $949 million through its IPO that was completed last November. It was the largest IPO by a retail REIT since Simon Property Group Inc. 20 years earlier. Brixmor’s debut in the public market came two-and-a-half years after Blackstone paid about $9 billion for Centro Properties Group’s U.S. retail assets and rebranded the company.

Read the full article in the June 2014 issue of CPE. Access is free!