S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.
Development activity in the U.S. real estate sector is showing signs of life amid growing confidence in the economic recovery, although the extent is sector-specific. As the pandemic took hold in 2020, real estate investment trusts maneuvered to preserve capital and developments were put on hold. Nareit noted that industrial property was the first sector to recommence development, owing to strong logistics demand.
Development work is expected to restart slowly in the hotel, retail and senior housing sectors. Office projects are on the rise again, with Cousins Properties Inc. commencing work on a speculative development in Austin, Texas, in June, Nareit noted.
The REIT industry entered the pandemic with strong balance sheets, and focused mainly on preserving capital during 2020 amid market uncertainty. Now that there are indications of economic recovery, REITs are deploying dry powder in development as well as acquisitions.
Rising construction costs and shortage of materials are expected to lower supply growth and may result in higher pricing power for REITs. Some industry experts believe the material shortages will normalize in 2022.
* VICI Properties Inc. agreed to buy MGM Growth Properties LLC for total consideration of $17.2 billion, including the assumption of about $5.7 billion in debt. The deal is expected to close in the first half of 2022.
* Shopping center real estate investment trust Weingarten Realty Investors completed its merger with and into Kimco Realty Corp., which will continue as the surviving public company.
* Melody Investment Advisors LP, on behalf of the funds and co-investors it advises and/or manages, offered $16.25 per common unit in cash to acquire all of the assets owned by Landmark Infrastructure Partners LP through a single transaction or a series of transactions.
* The Carlyle Group Inc. and its partners are aiming to sell up to 18 U.S. active-adult apartment properties worth about $1 billion in the next six months, Real Estate Alert reported.
* A limited liability company affiliated with The Blackstone Group Inc. bought a pair of apartment buildings in Seattle from a limited liability company of The Goldman Sachs Group Inc. for nearly $302.8 million, the Puget Sound Business Journal reported.
* Ally Financial Inc., through its STS Properties LLC affiliate, paid $390 million to purchase the Ally Charlotte Center office building in Charlotte, N.C., from Crescent Communities, the Charlotte Business Journal reported.
* H&R Real Estate Investment Trust agreed to sell 100% ownership of the land and building of the 2.0 million-square-foot Bow in Calgary, Alberta, and 45% interest in the net rent payable under the Ovintiv lease to expiry in May 2038, for combined gross proceeds of approximately C$1.47 billion.
NAV Monitor: US equity REITs trade at 6.0% premium to NAV at July-end