Following a quiet start in 2014, activity in the public, non-listed REIT sector is picking up with Ventas' deal to acquire ARC Healthcare Trust for $2.6 billion in cash and stock and Kite Realty Group Trust's $2.1 billion merger with the Inland Diversified Real Estate Trust. Other deals are pending, such as Regency Centers' offer to acquire AmREIT and NorthStar Realty Finance's negotiations to buy Griffin-American Healthcare REIT II.
Kite Realty Group conducted an extensive and in-depth due diligence of Inland Diversified's holdings before its $2.1 billion all-stock acquisition of the portfolio.
CEO John Kite personally visited almost all of Inland's 57 centers, eating and quizzing shoppers and store owners. The deal is a transformative one for the company, doubling its footprint and differentiating it from other retail REITs, analysts say.
Business development company exchange-traded funds have outpaced other investment opportunities over the past five years, with the BDC index rising 213%. And looking ahead, performance may be enhanced by stricter lending rules for competing banks, leading to more demand from middle-market companies for BDC lending.
Kite Realty Group Trust is acquiring Inland Diversified Real Estate Trust for $1.2 billion -- about $10.50 a share. The stock-for-stock transaction will expand Kite's geographic footprint into such markets as Salt Lake City and Las Vegas and create a retail landlord with a 20-million-square-foot portfolio, double Kite's current portfolio. The REIT will now own 131 properties in 26 states.