Google paying $2.1B for NYC office property; Ventas completes $2.3B acquisition

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

The increasing demand for quality lab space has given rise to a boost in prices, especially as such life sciences properties are hard to find. Rents are also on the rise for lab space, leading investors to convert traditional office buildings into life sciences properties with lab spaces to meet demand. Daniel Littman, associate director of capital markets research for Newmark, told WealthManagement.com that institutional investors are reevaluating their office, flex and industrial portfolios.

Prices for such properties are rising and buyers are accepting lower yields, and life sciences deals accounted for up to a record 16.4% of all office deals in 2020, according to Newmark. Rents have been rising even before the pandemic, with average San Francisco life sciences property rents having doubled in the five years ended in the first quarter of 2021. The Chicago and Raleigh, N.C., markets also saw life science rent increases of more than 80% during the period, WealthManagement.com reported, citing Newmark.

Merging lanes

* Healthcare REIT Ventas Inc. completed the roughly $2.3 billion acquisition of New Senior Investment Group.

* CIM Real Estate Finance Trust Inc. and fellow nontraded REIT CIM Income NAV Inc. agreed to merge in a stock-for-stock transaction. The transaction would result in a pro forma combined company with an aggregate enterprise value of about $6.0 billion.

* Self-storage facility operator All Storage has enlisted CBRE Group Inc. to work on a potential sale of the company, Bloomberg News reported, citing people with knowledge of the matter. The sources said the sale could fetch more than $1 billion.

Property deals overdrive

The week saw a flurry of property deals in the U.S., particularly in the office sector, indicating buyers' confidence in the sector's recovery.

* Google is buying a 1.3 million-square-foot office building in Manhattan, N.Y.'s West Side for $2.1 billion in what is the largest deal for a single U.S. office building since the beginning of the pandemic, Dow Jones Newswires reported.

* AGC Equity Partners Ltd. is buying a 658,000-square-foot office campus in San Jose, Calif., for roughly $775 million, Green Street's Real Estate Alert reported. The campus is leased by Verizon Communications Inc. and is under development.

* Mack-Cali Realty Corp. is set to sell its 42-story office tower at 101 Hudson St. in Jersey City, N.J., for $380 million, unnamed sources told the Commercial Observer.

* Kilroy Realty Corp. paid $490 million for the West 8th office building in Seattle's Denny Regrade neighborhood. The 28-story property spans 539,000 square feet and is anchored by Amazon.com Inc.

* Jamestown LP is buying the Home Plate Center office campus in Seattle for $251 million, the Puget Sound Business Journal reported, citing public records.

* Pebblebrook Hotel Trust paid $270 million for the Margaritaville Hollywood Beach Resort in Hollywood, Fla. The 6.2-acre asset has 369 rooms, more than 30,000 square feet of indoor and outdoor event space, an 11,000-square-foot spa and other features.

* An 816-unit apartment property with two 30-story towers that is connected to a Brightline passenger rail station in Miami is up for sale with an asking price of $500 million, the South Florida Business Journal reported.

ESG commitment

* Marriott International Inc. is targeting net-zero value chain greenhouse gas emissions by no later than 2050 and aims to hit its emissions reduction targets across all scopes.

63 US REITs announce dividend increases YTD through August-end

More banks exceeded CRE loan concentration guidance in Q2