REITs log record-high Q1 FFO; North American RE companies advance net-zero goals

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U.S. real estate investment trusts' first-quarter funds from operations were a record high at over $18 billion, a 30.9% surge from a year ago, according to Nareit's Total REIT Industry Tracker Series report.

Nareit is the U.S.-based trade association for REITs and publicly traded real estate companies.

Sectors that took a beating during the pandemic showed strong earnings improvement, such as free-standing retail, which was up 37.3% during the quarter, and lodging/resorts, which was up 29.7%, according to the report.

The self-storage, industrial, infrastructure, residential, data center, retail and specialty sectors recorded FFO that surpassed pre-pandemic levels. Sectors with FFO below pre-pandemic levels include healthcare, office, diversified and lodging/resorts.

CHART OF THE WEEK: North American RE companies' net-zero progress

⮞ Large publicly traded real estate companies in North America are making headway in the transition to net-zero.

⮞ Prologis Inc., which is the largest industrial REIT in the world in terms of market capitalization, achieved its initial net-zero goals ahead of schedule, company officials said.

⮞ SL Green Realty Corp., Kimco Realty Corp. and Equity Residential were among the other real estate companies that have stepped up their net-zero goals after achieving their initial targets.

Top-dollar property deals

* Boston Properties Inc. completed the approximately $730 million acquisition of the roughly 760,000-square-foot Madison Centre office building in Seattle.

* Cortland Partners LLC is paying more than $1 billion to purchase four apartment properties in Arlington, Va.

* Partners Group Holding AG bought a U.S. portfolio of single-family rental homes valued at $1 billion from affiliates of Fortress Investment Group LLC and Kairos Living.

M&A

* MGM Resorts International completed the roughly $1.63 billion acquisition of the operations of The Cosmopolitan of Las Vegas hotel and casino resort from Blackstone Inc. Stonepeak Partners LP, Cherng Family Trust and Blackstone Real Estate Income Trust Inc., the group that bought the resort's real estate assets, agreed to lease The Cosmopolitan to MGM for 30 years, with three 10-year renewal options.

* Blackstone Real Estate Income Trust wrapped up the $3.7 billion acquisition of multifamily-focused Resource REIT Inc.

* Swedish private equity firm EQT AB (publ) is buying Redwood Capital Group LLC, a Chicago-based residential core plus and value-add investment manager. Redwood will be combined with the multifamily group of EQT's EQT Exeter platform.

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