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- December 2008: Vol. 20 No. 12

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The Big Chill: Only 13 M&A Transactions Involving Real Estate Firms Were Completed in 2008

by Larry Gray

After a banner year in 2007 that recorded 47 mergers and acquisitions involving real estate–related firms, M&A activity in 2008 has slowed to a snail’s pace. A weak economy, financial market turmoil, uncertainty of a new presidential administration and a severe credit crunch have combined to suppress deals this year. Only 13 M&A transactions involving real estate–related firms were completed in 2008, a significant reduction from the 47 deals tracked in 2007.

Five of the transactions included REITs (see table below), following 28 such deals in 2007. The LBO activity that fueled M&A volume for the previous three years and served to privatize a significant number of REIT property holdings hit the skids with the onset of the credit crunch in the latter part of 2007. There was only one REIT-to-REIT deal: American Campus Communities, a student housing REIT, acquired one of its competitors, GMH Communities Trust, in a deal valued at approximately $1.4 billion.

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