Kroupa said “The speed with which some of these entities have embarked [on the liquidity question] has been accelerated because of favorable market conditions. These REITs have had the benefit of being able to acquire properties at fantastic prices.”
As nontraded REITs begin seeking ways to turn their assets into cash, lawyers and investment bankers help companies weigh the pros and cons of pursuing IPOs versus sales. With acquirers brimming with cash and an IPO market that has been favorable to real estate companies over the past couple of years, companies — armed with large property portfolios — have several strong exit options. They can list with an initial public offering, list without an initial public offering and instead use a tender offer, be acquired, merge with an existing REIT or even execute a reverse merger, Kroupa said.