In the 1997 movie Austin Powers: International Man of Mystery, when Dr. Evil announces to his staff his dastardly plan to hold the world ransom for “one million dollars,” he’s informed the figure isn’t as headline-grabbing as it used to be. The same might be said of $1 billion transactions in the commercial real estate world today.
While billion-dollar deals are nothing to sneeze at, they have been relatively commonplace during the past few months. The amount of money changing hands has been a little mind-boggling:
- Blackstone to buy apartments from Greystar in $2 billion deal
- Inland Real Estate to be acquired by DRA Advisors for $2.3 billion
- Blackstone, Ivanhoé Cambridge close on $5.3 billion Stuyvesant Town deal
- Exeter sells 58 million-square-foot U.S. industrial portfolio to PSP Investments/ADIA joint venture for $3.15 billion
- Starwood buys Equity Residential apartments for $5.4 billion
- JV acquires InvenTrust’s University House student housing platform for $1.4 billion
- AXA Financial trades 787 Seventh tower to CalPERS for $1.9 billion
- Invesco, Simon to acquire CityCenter Las Vegas mall from MGM, Dubai for $1.1 billion
- Blackstone to sell Strategic Hotels & Resorts to Anbang for $6.5 billion
And most recently, Starwood Hotels & Resorts Worldwide has been the target of heated bidding between Marriott International and a consortium of investors led by Anbang Insurance Group of China. Marriott’s most recent offer values Starwood at approximately $13.6 billion.
Expect more billion-dollar deals to be coming down the pike as capital flows to the asset class are forecast to increase in 2016. CBRE’s 2016 Global Investor Intentions Survey revealed that 82 percent of respondents indicated their investment activity would be the same or greater compared to 2015.
Assuming Dr. Evil doesn’t hatch a new destructive plan or we don’t experience some other “black swan” event, CBRE boldly states that capital flows this year will total more than “one trillion dollars.”
Now that’s a lot of money.
Not a subscriber to IREI Insights blog? Sign up to receive alerts on new blog posts.
Larry Gray is editorial director of Institutional Real Estate, Inc.
