12 Apr, 2024
US REITs occupancy higher vs. broader sector; Blackstone buying Apartment Income
By Karl Angelo Vidal and Joyce Guevarra
S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.
Publicly listed equity real estate investment trusts in the US recorded higher occupancy rates than the broader commercial real estate market in the fourth quarter of 2023, according to a report from Nareit.
Nareit is the US-based trade association for REITs and publicly traded real estate companies.
Nareit's Total REIT Industry Tracker Series, which focuses on public equity REITs, showed occupancy rates of 95.7%, 96.5%, 96.9% and 88.1% for the apartment, retail, industrial and office sectors respectively, in the last quarter of 2023.
On the other hand, data from CoStar, which covers the broader real estate market, had lower occupancy rates of 92.4%, 96%, 94.3% and 86.5%, respectively, for the same period.
The occupancy rate of office REITs started decreasing in 2019 but has leveled off at 88.1% in the last two quarters of 2023.
The higher occupancy rates of REITs suggest they have better asset selection and operational performance, Nareit said.
CHART OF THE WEEK: US equity REITs' ATM offering proceeds up in Q4'23
⮞ Proceeds from US equity REITs' at-the-market (ATM) programs totaled over $6.65 billion in the fourth quarter of 2023, up 13.6% year over year.
⮞ The quarterly total marks the third-highest amount in a single quarter by the sector.
⮞ Retail REIT Realty Income Corp. raised $1.60 billion in gross proceeds via its ATM program, the highest amount among the REITs during the quarter.
Top deals
– Blackstone Real Estate Partners X LP agreed to take Apartment Income REIT Corp. private for $39.12 a share in an all-cash transaction valued at approximately $10 billion, including the assumption of debt. The acquisition is expected to close in the third quarter of 2024, subject to approval by the REIT's stockholders and other customary closing conditions.
– KKR & Co. Inc. is acquiring the fully leased 1.8 million-square-foot Park 8Ninety industrial park near Houston for $234 million from Artis REIT, Green Street's Real Estate Alert reported. Tenants at the property include Comcast, Rexel, Texas AirSystems and VWR International.
– A Hyatt Hotels Corp. affiliate agreed to sell the fee-simple interest in the 630-room Hyatt Regency San Antonio Riverwalk for $230 million to Sunstone Hotel Investors Inc.
– Ashford Hospitality Trust Inc. closed the sale of Hilton-Boston Back Bay in Boston for $171 million or $438,000 per key of the 390-room hotel. Ashford used the sale proceeds to reduce its debt.
US hotel performance
Three key metrics of US hotel performance were all up during the week ended April 6, STR reported, citing data from CoStar, which provides information and analytics on property markets.
Occupancy came to 64.1%, a gain of 4.7% over the comparable week in 2023.
Average daily rate (ADR) was up 2.1% to $156.96 and revenue per available room (RevPAR) improved 6.9% to $100.59.
Among the top 25 markets, Philadelphia saw the largest year-over-year occupancy increase, while Phoenix recorded the largest gain in both ADR and RevPAR.
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