The latest attempt at a single-building REIT
[{"id": "cm73g6m", "text": "Seems like a pretty dumb idea to me.  Single building REIT is not a big deal, single building public company seems to me that it would have an absurd increase in cost just to manage the reporting/management requirements for a public company, not to mention just pay the investment bankers to do the IPO. \n\nAlso, the folks paying the most for buildings in A markets are often the pension plans or sovereign wealth, who probably would just buy the building outright instead of investing via stock. ", "replies": [{"id": "cmdkcbj", "text": "This sounds about right.  The one caveat I would add is that at that scale (talking about an $850+ million building), the economics are not terrible.  So the costs don't seem too horrific in comparison.  \n\nAs you mention, it's more about the arbitrage between public equities and acquirers of core assets ... And I would tend to agree with you that that arbitrage is basically nonexistent here.\n\nOut of curiosity, I looked up recent class A Boston cap rates, and I see high 4s ( http://www.jllblog.com/boston/wp-content/uploads/2014/02/JLL-_CapitalMarkets_2014BostonPerspective.pdf ).  By my rough math, Boston-based office REIT Boston Properties (to pick an example) is trading at high 4s but definitely NOT any lower than that - and still possibly slightly higher than class A Boston cap rates.  \n\nAcross the board, given that the market is chasing yield and REITs are yield-driven stocks, REITs in general are fairly valued, yes, but I don't think they are going for more than their asset values.", "replies": [], "depth": 2}], "depth": 1}]