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2 data center REITs snapped up; Realty Income completes office spinoff

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2 data center REITs snapped up; Realty Income completes office spinoff

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

Editor's note: The Week In Real Estate will not publish Friday, Nov. 26. Your next issue will be Friday, Dec. 3.

U.S. property prices increased at the fastest annual rate in October in the history of the RCA CPPI National All-Property Index, which jumped 15.9% year over year and 1.7% from September, according to Real Capital Analytics. The index comprises office, industrial, retail and apartment properties.

Investor demand for commercial real estate in the U.S. has been high in 2021, resulting in a total of $523.8 billion in acquisitions in the year through October, reflecting a 70% rise from the year-ago period.

Apartment deals in the 10-month period totaled $201.3 billion, jumping 96% year over year and surpassing all other sectors by a wide margin. The second-highest spending was in the industrial sector at $107.6 billion, marking a 48% year-over-year rise. Office deals totaled $94.9 billion in the period, up 40% year over year. The office index was up 13.7% year over year, driven mainly by suburban office assets, Real Capital Analytics noted.

On strategy

* Communication towers real estate investment trust American Tower Corp. agreed to acquire data center REIT CoreSite Realty Corp. in a deal valued at $10.1 billion, Dow Jones Newswires reported. This deal reflects American Tower's confidence that 5G will take off and generate sizable data requirements, according to Kelly Morgan, research director at 451 Research.

* Private equity giant KKR & Co. Inc. and Global Infrastructure Partners LLC agreed to buy data center REIT CyrusOne Inc. in a deal valued at around $15 billion including debt, Dow Jones Newswires reported.

* Realty Income Corp. completed the spinoff of substantially all of its office assets into a new independent publicly traded REIT, Orion Office REIT Inc.

Real estate fundraising

* Lincoln Property Co. and Cadillac Fairview raised $1.8 billion of equity commitments for a U.S. multifamily fund, Multi-Housing News reported.

* Kayne Anderson Real Estate, the real estate private equity arm of Kayne Anderson Capital Advisors LP, raised $2.75 billion for its sixth opportunistic equity fund.

Big-ticket deals

* Starwood Capital Group Management LLC bought six apartment communities across the Triangle area in North Carolina from Prudential Real Estate Investors affiliates for $565 million, the Triangle Business Journal reported.

* Clarion Partners LLC sold the NorthEdge building in Seattle to Blackstone Inc.-backed BioMed Realty Trust Inc. for $220 million, the Puget Sound Business Journal reported, citing a King County affidavit.

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