The market continued its momentum toward a record year in the third quarter of 2021, driven in part by a rush to close deals ahead of potential capital gains tax changes and the strong linkage between owned real estate and middle market M&A targets more broadly. Business valuations reached notable heights during the period, per GF Data, sustaining an attractive arbitrage between business and real estate multiples across many middle market sub-sectors. Looking ahead, expected rollover activity from deals that launched too late in 2021 to close by year end, combined with generally favorable conditions for sale leasebacks, pointed to an active start for 2022.
