You’d think that rising interest rates would deter a finance-dependent industry from getting bigger and stronger.
Not so for the real estate market, according to the Intralinks’ Deal Flow Predictor, which revealed a rise in North American M&A activity by 57% in 2015 alone!
As prices for commercial and residential real estate continue to rise in 2017, a thriving economy keeps pushing rent as well as occupancy rates higher—giving real estate owners a reason to rejoice with a healthy net operating income.
A significant part of this trend is the engagement of private equity firms as they invest considerably in commercial real estate brokers; not to mention the rise of technology acquisition in real estate.
In fact, CB Insights reported that real estate tech companies broke records set in 2012 by raising over $222 billion in just the third quarter of 2016!
This definitely points towards a technology revolution in real estate, as mergers and acquisitions continue to dominate the market. An excellent case in point would be the consolidation of two major real estate listing sites, Zillow and Trulia, when they signed a whopping $3.5 billion merger in 2015—as well as the notable PadMapper and Zumper acquisition in 2016.
So, can we expect M&A activity to cease with the Federal Reserve raising interest rates?
Not in the slightest.
Can We Expect the M&A Boom to Last?
Mergers and acquisitions are funded primarily through stock, cash and debt—all three of which currently seem to be favoring corporations in the US.
With the equity market performing exceptionally well in 2017, corporations are smart to take advantage of stock-funded mergers in the current economic climate.
In addition, companies are unable to boost profitability as quickly as they’d like, using only internal measures since the global financial crisis.
As earnings and revenue fail to pick up the pace, more and more companies are now buying growth through acquisition strategies instead of building it organically, to overwhelming results.
The Final Word
All this fares particularly well for real estate executives and land development directors, especially since Mergers and Acquisitions Mid-Market Pulse predicts a rise in M&A activity over the 12-month period within the financial services, insurance and real estate sector (FIRE).
If you are looking to benefit from the current M&A trend, get acquainted with commercial real estate headhunters, who can target specific profiles and bring you peak performers from your direct competitors!
International Search Consultants has been providing highly qualified candidates within the Real Estate Acquisition & Land Development space since 1999.
With our comprehensive, industry specific database, to our tenured team of seasoned executive recruiters that focus exclusively on filling Real Estate Acquisition & Land Development positions, we are second to none when it comes to delivering ‘the best of the best’, leading, top-performing Real Estate Acquisition & Land Development professionals to our clients.
Our experienced executive search recruiters will customize an executive recruiting campaign tailored to your specific requirements. With access to literally every high-tech executive search recruiting tool available, we are able to target very specific profiles, including peak performers from your direct competitors.
ISC understands your needs for candidates with existing relationships with targeted clients and the industry specific knowledge to drive your company’s growth. We also strive to make a match with regards to your company culture. Our highly skilled executive search recruiters will deliver industry-specific candidates for your critical fill openings, based on your specific needs, ideal profile, and business objectives.
We are adept at building teams from scratch, as well as helping you top-grade your existing team by identifying your weak links and providing stellar candidates to increase over-all team productivity. We encourage you to assess the bench strength of your existing team today, and let us help you take things to the next level.
We invite you to call on International Search Consultants today for ALL of your Real Estate Executive Search needs.
Ann Zaslow-Rethaber is President of International Search Consultants, a leader in Executive Search since 1999.