Real Estate & REITs
Why do REIT take-privates cluster when REITs trade at discounts to NAV, and how can a buyer pay a premium to the share price yet still get a bargain?
Model answer
The arithmetic: if a REIT trades at a 25% discount to NAV, a sponsor can pay a 15-20% premium to the SHARE PRICE - enough to win the board - and still acquire the real estate below its private-market…
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