Private Equity Loves REITs

The Street.com had a nice article today on the growth in private equity deals done in the REIT space. The logic is simple. REITS can't have too much debt, and so they have such a high equity base that it is difficult for them to be bought out by most public companies. Private equity firms have the attractive feature of being able to take on enormous amounts of debt and flip some of the properties. The debt they take on is then securitized a sold in the CMBS or CDO market.