Luxury apartments in South Florida pile up; Presidio reviews strategic options

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

More luxury rental apartments are springing up in South Florida, creating a surplus of supply in the area, The Wall Street Journal reported.

The Miami metro area leads major markets in the US in terms of multifamily units under construction as a share of inventory, according to the report, which cited CoStar data.

Developers are racing to construct more high-end rental apartments in the area because the high cost of land, labor and construction would mean less profit on selling cheaper units.

CoStar said vacancies at the luxury rental sector in South Florida stood at 8.5%, higher than the 6.9% US average, and is poised to climb to 11% over the next two years.

CHART OF THE WEEK: 9 North American REITs increase dividends in August

⮞ Eight publicly traded real estate investment trusts based in the US and one based in Canada raised their regular dividend payments in August.

⮞ Hotel owner Sunstone Hotel Investors Inc. bumped up its quarterly cash distribution by 40% to 7 cents per share on Aug. 3, the biggest relative dividend increase in August.

⮞ The number of REITs that have announced dividend hikes so far in 2023 totals 59, or slightly above a third of the entire US REIT industry.

Billion-dollar lane

– The Kroger Co. and Albertsons Cos. Inc. will sell 413 stores, along with eight distribution centers, two offices and five private label brands, as part of the two grocery chains' planned merger. C&S Wholesale Grocers Inc. will acquire the assets for about $1.9 billion.

– Westcore Properties Inc. agreed to pay over $1 billion to buy a 16-property industrial portfolio in California, Commercial Observer reported. The assets span 3.5 million square feet and are fully leased.

– US Masters Residential Property Fund, an Australian REIT, is reportedly planning to exit its New York City metro area single-family portfolio. The billion-dollar portfolio comprises 479 properties, City Limits reported.

Strategic moves

– Presidio Property Trust, an internally managed diversified REIT, created a special committee of the board to evaluate potential strategic alternatives, including a business combination, a sale of all or part of the company's assets, and joint venture arrangements and/or restructurings.

– Silver Star Properties REIT Inc. said it continues its shift in strategy to focus on self-storage real estate after its indirect subsidiary, Hartman SPE LLC, filed a voluntary petition under Chapter 11 of the Bankruptcy Code, to improve its ability to sell its remaining legacy properties. Hartman, which recently completed the sale of its Prestonwood property in Plano, Texas, owns legacy office, retail and industrial properties.

See key people moves in North American real estate.

Data Dispatch: US REIT capital offerings nosedive 85% month-on-month in August

Data Dispatch: Construction loans, delinquencies at US banks grew QOQ in Q2 2023

US hotel occupancy, RevPAR drop in week ended Sept. 2 – STR

REIT Replay: US REIT shares slide during week ended Sept. 8