Joint ventures are becoming more popular among real estate investment trusts (REITs) that are growing, according to Nareit. Tight capital markets, market volatility and expanding REITs are supporting the growth of a joint venture strategy. Data centers, single-family rentals and health care are seeing a boost in joint venture announcements.
“I think the increased activity is just the desire to use JVs as an effective tool to build out their platforms and find alternative capital sources,” said Scott Maguire, global head of real estate securities solutions at CenterSquare Investment Management, in a statement.
The uptick in joint venture formations began when interest rates began increasing a few years ago. These formations provide several benefits to REITs, such as access to large amounts of capital, the ability to monetize assets while retaining operating control, and taking on higher leverage at the joint venture without increasing the company’s overall leverag
