REIT M&A reaches record level; Canada's Tricon Residential to list in US

S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.

Real estate investment trusts logged a record $108 billion in M&A transactions as of Sept. 30, breaking a 15-year record that was set in 2006, according to a new report from JLL's Capital Markets M&A and Corporate Advisory.

Factors driving the surge in activity include strong earnings growth, positive bottom lines across all major REIT sectors, and increasing demand for alternative asset classes such as data centers, cold storage, life sciences, manufactured housing and medical office buildings. Investors are flocking to REITs seeking higher-than-average risk adjusted returns. The asset class has attractive in-place yield, lower capex requirements and a high long-term NOI growth outlook, according to the report.

Alternative asset classes contributed nearly 10% of 2021's year-to-date transaction volume compared to approximately 6% in 2016. The significant demand and shortage of supply in the sector is expected to continue in 2021 and beyond, with fewer and fewer attractive opportunities to execute on, JLL Managing Director Sheheryar Hafeez said.

Of company strategy

* Canada-listed Tricon Residential Inc. is planning an IPO in the U.S. and its shares are expected to begin trading on the NYSE on Oct. 7. Tricon, an owner and operator of single-family rental homes and multifamily rental apartments, priced its offering at US$12.40 per share. The company's IPO and a concurrent private placement are expected to raise gross proceeds of US$503 million.

* Activist hedge fund Elliott Investment Management LP is urging Healthcare Trust of America Inc. to consider a possible sale of the company along with other strategic alternatives, Bloomberg News reported, citing people familiar with the matter.

Top dollar

* Private equity and real estate investment firm KKR & Co. Inc. raised $4.3 billion for KKR Real Estate Partners Americas III SCSp, a new opportunistic real estate fund focused primarily on the U.S.

* Physicians Realty Trust agreed to acquire a 15-building medical office portfolio spanning nearly 1.5 million square feet for approximately $764.3 million, subject to closing adjustments.

* PS Business Parks Inc. is selling Lusk Business Park in San Diego to an affiliate of Longfellow Real Estate Partners LLC for $315.4 million.

* Piedmont Office Realty Trust Inc.'s operating partnership will buy the office building at 999 Peachtree St. in Atlanta from a Franklin Street Properties Corp. subsidiary for $223.9 million.

Cross-border expansion

* Data center real estate investment trust Digital Realty Trust Inc. is considering listing a REIT on the Singapore Exchange Securities Trading Ltd.'s main board.

* Colliers International Group Inc. is acquiring a controlling stake in Antirion SGR, a Milan-based real estate investment management firm.

US equity REITs trade at median 0.3% premium to NAV as of Oct. 1

Residential REIT stocks log solid returns for Q3