CRE asking price, occupancy up in March; Blackstone buying PS Business Parks

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

Asking prices across all commercial real estate sectors rose month on month in March, GlobeSt.com reported, citing a report from commercial real estate agency Crexi.

Average asking price per square foot was 2.72% higher than a month earlier. Occupancy rates increased 1%.

Among property sectors impacted by the pandemic, the office and retail sectors saw "promising gains," the analysts said. Average office asking prices were up 6% and occupancy rose 2% from February. Average asking prices for retail properties inched up 9% month over month, while average occupancy for new listings reached 90%, according to the report.

CHART OF THE WEEK: Pension funds boost investments in multifamily, industrial, office REITs

⮞ Pension plan sponsors have significantly increased their investments in U.S. real estate investment trusts that specialize in multifamily, office and industrial properties since the end of 2019, S&P Global Market Intelligence data shows.

⮞ "Low vacancy and record rent growth in multifamily make it an especially attractive sector, while industrial continues to benefit from the boom in online retailing, and huge demand for modern logistics space, which was only accelerated by COVID-19," Pension Real Estate Association Director of Research Greg MacKinnon said in an interview.

M&A

* PS Business Parks Inc. agreed to a sale to private equity giant Blackstone Inc. for $187.50 cash per share in a deal totaling about $7.6 billion, including debt, Dow Jones Newswires reported. Self-storage real estate investment trust Public Storage, which owns about 26% of PS Business Parks, agreed to vote its shares in favor of the transaction. The company expects to receive about $2.7 billion of cash proceeds from the deal and distribute a $2.3 billion tax gain to its shareholders. Just a week earlier, Blackstone agreed to buy student housing REIT American Campus Communities Inc. for about $12.8 billion, including debt.

* Simon Property Group Inc. and Brookfield Asset Management Inc., owners of department store chain JCPenney, made an offer to acquire retailer Kohl's Corp., The New York Post reported, citing sources close to the talks. The duo tabled a $68 per-share proposal, which would value Kohl's at over $8.6 billion, the report said.

Trade lane

* Hersha Hospitality Trust is selling seven noncore urban select-service properties outside New York for gross proceeds of $505 million, Dow Jones Newswires reported. The hotel operator will use the proceeds to reduce debt.

* Miami investment fund CGI Merchant Group is expected to close its purchase of the Trump family's rights to the Trump International Hotel in Washington, D.C., for $375 million as early as May 2, Dow Jones Newswires reported, citing people familiar with the matter. The buyer plans to rebrand the property as a Waldorf Astoria, the sources said.

* Equity Residential is asking more than $750 million for five rental properties in Manhattan and Brooklyn, N.Y., as it continues to reduce holdings in New York and Washington, D.C., The Real Deal reported. The portfolio comprises 1,180 units.

Workers fight return to the office as employers rethink remote work

Canadian REITs capital market activity down by over 30% YOY in Q1