US commercial real estate sales to go up; Allied Properties closes C$1.35B sale

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

Sales of US commercial real estate are expected to pick up the pace as more owners agree to cut prices in the face of slumping valuation, high rates and rising vacancies, The Wall Street Journal reported.

There is a small but growing number of property owners beginning to unload their distressed assets at discount instead of awaiting recovery, according to the report. Office and other property owners carrying floating-rate debt could find it challenging to refinance with rates remaining elevated and may feel pressured to sell at reduced prices.

The second quarter saw an additional $8 billion worth of distressed commercial real estate, the publication reported, citing MSCI Real Assets data. The jump reflects the biggest quarterly increase since the second quarter of 2020.

On the other side of the fence, institutional investors such as Cohen & Steers, Goldman Sachs, EQT Exeter and BGO, formerly known as BentallGreenOak, are raising billions of dollars for new funds targeting troubled assets including office buildings and apartments, the report said.

CHART OF THE WEEK: Land & Buildings adds Lamar Advertising to portfolio

⮞ Land & Buildings Investment Management LLC added Lamar Advertising Co. to its portfolio after acquiring Lamar shares valued at $31.5 million at the end of the second quarter.

⮞ The activist investor increased its share count in a majority of its holdings during the period, including positions in Ventas Inc., Public Storage, Sun Communities Inc. and Prologis Inc.

⮞ During the quarter, the company exited Alexandria Real Estate Equities Inc.

Top deals

– Allied Properties Real Estate Investment Trust completed the C$1.35 billion sale of a portfolio of urban data centers in Downtown Toronto to KDDI Canada Inc., a subsidiary of Japanese telecom company KDDI Corp. The assets comprised of freehold interests in 151 Front Street West and 905 King Street West and a leasehold interest in 250 Front Street West.

– NexPoint Hospitality Trust subsidiary NHT Nashville LLC agreed to sell the Holiday Inn Express Hotel in Nashville in Tennessee for $120.0 million to NF V Acquisitions LLC. The deal is expected to close in the third quarter, subject to review by the TSX Venture Exchange.

– CIP Real Estate acquired the Clipper Court Commerce Center industrial park in Fremont, Calif., for $103.5 million. The 352,280-square-foot property is 89% leased to tenants including BASF Corp., Hyundai Corp., Kaeser Compressors and CTEMS Co.

Hotels in focus

– Private equity giant Blackstone Inc. sold three Marriott-branded hotels in Broward County, Fla., for a total of $64.3 million, Commercial Observer reported, citing property records.

– Marriott International Inc. will open its first Delta Hotels by Marriott-branded property in New York City. Delta Hotels by Marriott New York Times Square at 340 West 40th St.will contain 310 guest rooms.

– Hyatt Hotels Corp. signed franchise agreements to open the first location of its Hyatt Studios extended stay brand in Mobile, Ala., and Marysville, Calif.

See key people moves in North America real estate.

Average short interest in US REITs relatively flat in July

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