Real Estate Moguls Zell, Sternlicht Square Off Over One Very Prosaic Prize

SLB Capital Advisors discusses Equity Commonwealth and Starwood Capital’s interests in acquiring Monmouth Real Estate Investment Corp.

  • Scott Merkle discussed Equity Commonwealth and Starwood Capital’s interests in acquiring Monmouth Real Estate Investment Corp. with Linda Moss at CoStar
  • “While the pandemic did offer some opportunities for distressed investing for a brief period, we are in the midst of an incredibly strong commercial real estate market,” Merkle said. “With [Equity Commonwealth] sitting on a huge pile of cash, there simply aren’t any massive opportunities to acquire distressed real estate right now, and Monmouth offers [it] a smart way to re-engineer the company, change the focus to industrial real estate, deploy its large cash war chest, and drive the growth of a new high-quality industrial REIT.”
  • Merkle said he understands Zell’s and Equity Commonwealth’s interest in Monmouth, as well.  “The combined business will be well positioned to play in arguably the most sought-after real estate sector that has grown even stronger throughout the pandemic,” Merkle said. “Industrial real estate has been the darling property sector for years now with no end in sight. Demand for warehouse properties has continued to increase throughout this year, vacancies are at all-time lows, and rents have been growing at record levels.”
  • As for Starwood, it “is presumably attracted to some of these same aspects, namely that Monmouth owns a high-quality industrial portfolio providing any investor immediate scale at almost $3.5 billion,” according to Merkle.