17 Dec, 2021
Shopping centers lead retail recovery; KKR forms new RE investment platform
S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.
Editor's note:
The retail real estate sector is continuing its path to recovery, having made a comeback in the second quarter, and shopping centers are powering much of that growth.
Around 17 million square feet of these assets, which include open-air shopping centers and strip malls, was leased in the third quarter, marking an increase of 49% from 2019 and hitting a 10-year high for net absorption, The Wall Street Journal reported, citing commercial real estate services firm CBRE.
These properties thrived during the pandemic because they are typically anchored by grocery stores, which never closed, ensuring constant foot traffic, according to the report. Shopping centers also feature outdoor spaces used for events such as live music and movie nights that attract visitors. Retailers have also started using their stores as distribution and fulfilment hubs, where customers can easily pick up or return merchandise, the publication added, citing Conor Flynn, CEO of shopping center real estate investment trust Kimco Realty Corp.
Foot traffic across the country's grocery stores rose 3.6% year-to-date versus two years ago, the Journal reported, citing Placer.ai. Investors poured some $5 billion into these assets during the quarter, the second-most-active quarter in a decade, the publication reported.
Seizing opportunity
* Private equity giant KKR & Co. Inc. formed an investment platform focused on self-storage real estate in high-growth markets and strategic infill locations across the U.S. Alpha Storage Properties has an initial portfolio of 16 self-storage assets.
* Switzerland-based Partners Group Holding AG is teaming up with property developer StoryBuilt to fund more than $1 billion of acquisitions and development projects across the U.S. over the next four to seven years. The joint venture's pipeline includes multifamily, residential for sale and mixed-use real estate projects in Austin, Texas; Dallas; Denver; and Seattle.
* Oxford Properties Group Inc. and EverWest Real Estate investors established a joint venture that plans to build a roughly US$1 billion portfolio of infill, industrial properties across the U.S. The venture will focus on a mix of core-plus, value-add investments and developments that are near urban centers.
Buy and sell
* Brookfield Asset Management Inc. is considering a sale of a stake in the One Manhattan West office tower in Manhattan, N.Y., at a valuation of approximately $2.8 billion, Bloomberg Markets reported, citing people with knowledge of the matter.
* An affiliate of USAA Real Estate Co. acquired the Sentinel Square III office building at 45 L St. NE in Washington, D.C., from MetLife Investment Management for $305 million, the Washington Business Journal reported.
* An affiliate of DRA Advisors LLC acquired the 1.7 million-square-foot Boca Raton Innovation Campus office park in Boca Raton, Fla., for $320 million, the South Florida Business Journal reported. An entity managed by CP Group and representing joint venture partners Rialto Capital Management LLC and Siguler Guff & Co. LP sold the property.
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