Recent deals worth nearly $3 billion signal a turning point in REIT market activity, driven by rising private buyouts, better financing, and valuation disparities amid evolving global markets.
Since September, investors have committed roughly $3 billion to take three real estate investment trusts (REITs) private, signalling a potential turning point in a market that saw sluggish merger and acquisition activity for over a year. Although modest relative to the more than $1 trillion market capitalization of REITs, this recent deal activity suggests renewed momentum, particularly as well-capitalized firms gain easier access to debt financing.
The most significant transaction involved Ares Alternative Credit’s $2.1 billion cash acquisition of Plymouth Industrial REIT, which owns 226 industrial buildings across ten U.S. markets. This offer represented a premium exceeding 40% compared to an earlier unsolicited $1.1 billion bid from Sixth Street Partners. Plymouth’s board had approved the Sixth Street bid but took advantage of a “go-shop” period to secure the more favourable deal with Ares. This purchase highlights the ongoing valuation gap between public REIT prices and private asset values, which has persisted despite some sectors in other industries, such as technology, enjoying strong market performance.
Office and retail-focused REITs have struggled with lingering pandemic-era concerns regarding demand and oversupply. For example, Paramount Group, an office REIT with significant properties in New York City and San Francisco including a stake in the M&M’s store in Times Square, agreed to be acquired by Rithm Capital for approximately $1.6 billion. This deal followed revelations of governance issues involving undisclosed payments linked to the then-CEO, which attracted SEC investigation and dampened investor confidence. Paramount’s acquisition price was notably below its recent public valuation but above its trading lows, underscoring the complex impacts of governance on market pricing.
In October, Sotherly Hotels, representing a smaller-scale transaction, also announced plans to be taken private at a 153% premium over its stock price, pointing to a broader willingness among investors to pay premiums amid public valuation uncertainty.
Despite these headline deals, experts caution that overall deal volume remains modest relative to the market’s size. Collete English Dixon, director of the Marshall Bennett Institute of Real Estate, notes that while several transactions mark an increase in activity, the total dollar volume is not yet transformative. However, the outlook for 2026 appears robust, with multiple large potential acquisitions in the pipeline, including BlackRock and MGX’s anticipated $40 billion acquisition of Aligned Data Centers, immune to the ups and downs of market sentiment thanks to the surge in AI-related infrastructure demand. Brookfield is also reportedly considering a bid exceeding $10 billion for Yes Communities, a manufactured housing REIT currently owned by Singapore’s sovereign wealth fund GIC.
The resurgence in REIT M&A activity aligns with improved financing conditions. After a difficult first half of the year characterized by scarce and expensive debt, banks have re-entered underwriting loans, competing aggressively with private equity funds flush with capital earmarked for deployment. Analysts highlight that today’s real estate financing environment is markedly different from a decade ago, with abundant capital and multiple large funds seeking attractive investments.
This backdrop of plentiful capital contrasts with persistent valuation divergences between public REITs and private real estate assets. Data from multiple sources, including Green Street Advisors and CenterSquare, indicate that implied cap rates in public markets generally remain elevated relative to private markets, although the gap is narrowing. For instance, public REITs had an average cap rate around 5.67%, slightly above private market cap rates of approximately 5.4%. The office sector still experiences the largest divergence, with public valuations reflecting higher perceived risk.
Market commentators from the National Association of Real Estate Investment Trusts (Nareit) acknowledge ongoing challenges posed by the gap between public and private valuations, which dampens transactional activity and valuation consensus. Interest rate expectations play a critical role, as potential Federal Reserve policy shifts could catalyse further convergence, thereby influencing REIT stock performance and investor confidence.
On a global scale, alternative REIT models are emerging, such as China’s nascent private REIT market launched in 2023. This sector offers property developers an innovative funding path amid liquidity challenges, expanding asset eligibility beyond consumer-oriented properties to include offices, hotels, and industrial parks with quicker regulatory approval and attractive yields around 5-6%. While showing substantial growth potential , with $12 billion expected to be raised in 2025 alone , this market also faces hurdles due to the quality of underlying assets and broader commercial real estate jitters in China.
Ultimately, the gradual thaw in public-private REIT valuations combined with abundant capital and evolving markets signals a more active landscape ahead. Investors and REIT managers increasingly contemplate the benefits of taking companies private amid persistent public valuation discounts. While large-scale buyouts remain complex, the blend of strategic capital deployment and improving financing conditions underpins a cautiously optimistic outlook for elevated REIT M&A activity through 2026 and beyond.
- https://www.bisnow.com/national/news/capital-markets/private-capital-circles-public-reits-as-valuation-gap-persists-131976 – Please view link – unable to able to access data
- https://www.reuters.com/world/china/chinas-private-reits-offer-new-funding-path-property-firms-2025-11-20/ – China’s emerging private REIT market, launched in 2023, has quickly become a vital alternative funding avenue for the country’s struggling property developers. With rising demand from professional investors attracted by higher yields (around 5%-6%), the private REIT market is set to raise a record $12 billion in 2025 alone. Unlike public REITs restricted to consumer-oriented assets, private REITs include a broader asset range like office towers, hotels, and industrial parks, and benefit from quicker and less stringent approval processes. The Shanghai Stock Exchange has already approved 17 private REITs this year, totaling 43 billion yuan, up from just three approvals in 2024. Notable successes include Seazen Group’s REIT backed by Wuyue Plaza. However, distressed developers—lacking quality income-generating assets—still struggle to qualify. Key investors include insurers and asset managers seeking stable, higher-yielding returns in a low-rate environment. While the private REIT market shows significant growth potential and complements the public REIT market, concerns persist over access to prime assets and ongoing weakness in China’s commercial real estate sector. Nonetheless, analysts view the platform as a significant innovation in easing liquidity pressures and reshaping property business models. ‘When the property market was in a fast-growth phase, developers focused on building and selling homes; now that the housing development incremental growth has faded, attention has shifted to revitalising existing stock – income-generating assets with long-term value.’ China’s private REITs complement public RE … . The U.S. has a public … . REITs make up about … . Despite the market’s growth prospects, … . ‘Prime office and logistic assets in … ,’ said Sigrid Zial … ). ‘The demand-supply imbalance is not … .’
- https://partners-cap.com/wp-content/uploads/Insights-2025-View-on-Real-Estate.pdf – Partners Capital’s 2025 Real Estate Insights report highlights that valuations in most real estate sectors began to stabilise in 2024. REITs rose approximately 5% during the year, while private real estate, which typically lags public markets, declined about 5%. Valuations across public and private markets are now comparable, with traditional public real estate sectors trading at a 5.2% cap rate, compared to a 5.4% cap rate for private real estate. This convergence suggests a narrowing valuation gap between public and private real estate assets. The report also notes that investor sentiment has improved, with most real estate investors believing values are likely to be stable or increase over the next 12 months. Additionally, 2024 saw the return of large opportunistic investors, most notably Blackstone, indicating a potential uptick in deal activity in the coming years.
- https://www.reit.com/news/blog/market-commentary/going-going-not-gone-public-private-real-estate-valuation-divergence – The National Association of Real Estate Investment Trusts (Nareit) discusses the persistent divergence between public and private real estate valuations. Despite efforts to close the gap, the spread between REIT implied and private appraisal cap rates remains wide. In the fourth quarter of 2024, the public-private cap rate spread stood at 120 basis points. This ongoing divergence presents challenges for property transactions and indicates that the valuation gap is not closing as quickly as anticipated. The article suggests that while progress has been made, the divergence continues to impact the commercial real estate market.
- https://partners-cap.com/wp-content/uploads/Insights-2024-View-on-Real-Estate.pdf – Partners Capital’s 2024 Real Estate Insights report highlights a continued disconnect between public and private valuations, though this is narrowing. In 2023, Green Street Advisors estimated property values declined by 10% in the US and 11% in Europe. Office valuations were the most impacted, declining by 27%, while industrial was the least impacted of the major sectors. The report also notes that the aggregate valuation gap of approximately 4% implies real estate remains ‘cheaper’ in the public markets. However, these reported private valuations do not reflect the new acquisitions being executed by managers, which have stabilised cap rates above 6%, and often above 7%. The report suggests that the valuation gap may continue to narrow as private market valuations adjust.
- https://www.centersquare.com/wp-content/uploads/2025/01/CenterSquare-REIT-Cap-Rate-Perspective-Q4-2024_Summary-Report.pdf – CenterSquare’s Q4 2024 REIT Cap Rate Perspective report provides data on the implied cap rates for various real estate sectors. The report indicates that the REIT implied cap rate for all REITs is 5.67%, with a 5-year average of 5.28%. The private market cap rate is 5.43%, with a 5-year average of 5.43%. The valuation gap between public and private markets is approximately 4.2%. The report also provides sector-specific data, highlighting that the office sector has a REIT implied cap rate of 7.52% and a private market cap rate of 6.94%, resulting in a valuation gap of 7.2%. The report suggests that while there is a valuation gap, it is narrowing, and the market is moving towards convergence.
- https://www.reit.com/news/blog/market-commentary/long-goodbye-divergence-public-and-private-real-estate-valuations – Nareit discusses the ongoing divergence between public and private real estate valuations, noting that the recovery from this divergence is approaching two years. Despite efforts to close the gap, the public-private cap rate spread remains wide. The article suggests that while progress has been made, the divergence continues to impact the commercial real estate market. The article also notes that expectations of federal funds rate cuts and declining interest rates may influence REIT performance and the convergence of valuations in the future.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The narrative discusses recent acquisitions of Plymouth Industrial REIT by Ares Alternative Credit and Makarora Management, with the deal announced on October 24, 2025. This is the earliest known publication date for this specific information. The report includes updated data on the acquisition, suggesting a higher freshness score. However, the narrative also references earlier events, such as the unsolicited bid from Sixth Street Partners in August 2025, indicating some recycled content. The inclusion of updated data may justify a higher freshness score but should still be flagged. The narrative does not appear to be based on a press release, as it provides analysis beyond the official announcement. No discrepancies in figures, dates, or quotes were identified. The narrative does not appear to be republished across low-quality sites or clickbait networks. Overall, the freshness score is 8.
Quotes check
Score:
9
Notes:
The narrative includes direct quotes from individuals such as Jeff Witherell, CEO of Plymouth Industrial REIT, and Chad Pike, Founder and CIO of Makarora. These quotes are consistent with those found in the official press release dated October 24, 2025. No earlier usage of these exact quotes was found, indicating originality. The wording of the quotes matches the official release, with no variations identified. Overall, the quotes score 9.
Source reliability
Score:
7
Notes:
The narrative originates from Bisnow, a real estate news outlet. While Bisnow is known for industry-specific reporting, it is not as widely recognised as major outlets like the Financial Times or Reuters. The report does not mention any unverifiable entities or individuals. However, the reliance on a single outlet for this information introduces some uncertainty. Overall, the source reliability score is 7.
Plausability check
Score:
8
Notes:
The narrative presents plausible claims regarding the acquisition of Plymouth Industrial REIT by Ares Alternative Credit and Makarora Management, with details consistent with the official press release. The report includes supporting details from the press release, enhancing credibility. The language and tone are consistent with industry reporting standards. No excessive or off-topic details are present. The tone is formal and appropriate for the subject matter. Overall, the plausibility score is 8.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative provides a timely and original report on the acquisition of Plymouth Industrial REIT, with consistent quotes and plausible claims. The source, Bisnow, is a recognised industry outlet, and the content aligns with official announcements. No significant issues were identified, leading to a PASS verdict with high confidence.