Real estate deals insights: Q2 2019

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Executive summary

Deal activity for the quarter was down. However, we have seen signs of acceleration and we continue to believe that deal activity will accelerate further, with industry disruption becoming a more important driver. This disruption we believe will cause certain sectors to remain in favor, new business models to emerge, new risks to be navigated, and a premium being placed on convenience, choice and the creation of world class experiences. It is an incredible time to be a part of the real estate industry but it will also require increased forward thinking and scale in order to navigate a continuously shifting landscape.


“We continue to believe that deal activity will accelerate throughout the balance of the year and beyond, with industry disruption becoming a more important driver. It is becoming more a question of scale and survival rather than just relative value.”

Tim Bodner, US Real Estate Deals Leader

Key trends and highlights

  • Deal value and deal volume (excluding announced but not yet closed deals) declined in the second quarter of 2019, as compared to both the second quarter of 2018 and the first quarter of 2019. This quarterly figure excludes the impact of Blackstone’s mega deal acquisition of GLP’s US logistics assets for $18.7 billion. Taking into account the impact of this transaction, Q2 2019 deal value would be 10% higher than during the prior quarter.
  • REIT capital raising showed a resurgence in Q2 2019, more than doubling the volume seen in Q2 2018 and registering as the highest quarterly total since Q3 2017. While debt fundraising remained popular, secondary equity offerings also accounted for nearly half of this quarter’s total capital raised a significant increase from prior periods. This spike in equity capital raising comes on the back of the outperformance of real estate sector returns as compared to the broader market.
  • Across all core REIT sectors, discounts to net asset value (“NAV”) have declined in the first half of 2019 (with some sectors trading at a premium to NAV). This has contributed to an increase in REIT secondary equity capital raising, and we believe that it may also lessen the volume of public to private M&A activity, while increasing public to public mergers and incentivizing IPOs.

Contact us

Tim Bodner

Real Estate Deals Leader, PwC US

Andrew Alperstein

Real Estate Acquisitions Leader, PwC US

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