23 Jul, 2021
Retail Properties, Kite Realty to merge; Monmouth rejects Starwood offer
By Abdullah Khan
S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.
Hotel and shopping center real estate investment trusts are expected to report high year-over-year increases in funds from operations in their second-quarter earnings calls, according to S&P Global Market Intelligence estimates.
Hotel REITs are forecast to lead the pack, as optimism about the sector's gradual recovery has remained strong since the start of the year. Host Hotels & Resorts Inc. is expected to report FFO of 2 cents per share, compared to negative 26 cents per share in the same period of 2020.
Shopping center REITs are expected to report high growth, at a median of 28.8%. Office REITs, however, are forecast to report declining FFO per share. Vornado Realty Trust's consensus FFO per-share estimate for the second quarter is 72 cents per share, compared to $1.06 in the second quarter of 2020.
Find out more in this week's chart watch.
Business combinations
* Retail Properties of America Inc. agreed to merge into a subsidiary of Kite Realty Group Trust to form a combined group expected to have an aggregate enterprise value of nearly $7.5 billion upon closing.
* Monmouth Real Estate Investment Corp. reaffirmed its support for its pending merger with Equity Commonwealth and rejected Starwood Capital Group's revised all-cash offer of $19.51 per share reduced by the termination fee owed to Equity Commonwealth of $62.2 million, or 63 cents per share, implying a net consideration of $18.88 per share.
* The Ontario Superior Court of Justice approved Brookfield Property Partners LP's sale of its entire limited partnership units to Brookfield Asset Management Inc. in a deal that is expected to be completed July 26.
* Brookfield Asset Management is considering a potential bid to take alstria office REIT-AG private, Bloomberg News reported, citing people familiar with the matter. The Canadian asset manager owns an 8.35% stake in the German office landlord, which reportedly has a roughly €3.3 billion valuation.
* QTS Realty Trust Inc. did not get any alternative proposals from third parties it contacted during the go-shop period, which expired July 17. The go-shop period was provided under the company's merger agreement with The Blackstone Group Inc.
Property plays
* The Blackstone Group reached a deal to buy an approximately 15 million-square-foot, $2.2 billion U.S. industrial portfolio held by Cabot Industrial Value Fund V LP, a fund managed by Cabot Properties Inc., Real Estate Alert reported.
* Vornado Realty Trust agreed to buy the remaining 45% stake in the One Park Avenue office building in New York City from Canada Pension Plan Investment Board in a transaction that values the asset at $875 million for a total consideration of about $158 million in cash, plus Vornado's assumption of the Canadian pension fund's share of the existing debt.
* SL Green Realty Corp. sold a 49% interest in The News Building in New York City to South Korean investor Meritz Alternative Investment Management Co. Ltd. for $790.1 million.
Joint ventures
* VICI Properties Inc. entered into a strategic arrangement with The Blackstone Group portfolio company Great Wolf Resorts Inc. to provide certain financing for the construction of Great Wolf Lodge resorts across the U.S.
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* Dream Industrial REIT agreed to sell 20 of its U.S. properties to a new private open-ended industrial fund for about C$210 million in cash and a roughly 25% retained stake in the unnamed vehicle. The 98%-occupied portfolio is estimated to be worth about US$480 million, including deal-closing adjustments.
July retail market: US sales post surprise increase in June; inflation jumps
Hotel REITs forecast to report highest earnings growth in Q2