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Aimco prefers separation over takeover; KKR eyes $800M US warehouse portfolio


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Aimco prefers separation over takeover; KKR eyes $800M US warehouse portfolio

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

Data center real estate investment trusts have sold off in recent weeks amid growing optimism about COVID-19 vaccines but remain a safe investment for the future because of long-term demand trends, Mizuho Securities USA analyst Omotayo Okusanya argued.

In a note initiating coverage on the sector, Okusanya assigned "buy" ratings to Digital Realty Trust Inc., Equinix Inc. and QTS Realty Trust Inc. and "neutral" ratings to CoreSite Realty Corp. and CyrusOne Inc.., arguing that the approximately 13.3% decline in data center REIT stocks in the past six weeks was "overdone."

The sell-off likely was driven by concern that data center demand could slow as the pandemic ends and as investors rotate into sectors that will benefit more from vaccines. However, Okusanya said, "While there may have been some pull-forward of demand during the pandemic, rising demand is a secular, not cyclical, trend."

READ MORE: Sign up for our weekly coronavirus newsletter here, and read our latest coverage on the crisis here.

Separate preferences

* The board of Apartment Investment & Management Co. rejected a conditional nonbinding indication of takeover, calling it grossly inadequate and not in the best interest of the multifamily REIT and its stockholders, without naming the interested party. The board said the company will proceed with its plan of separation of Aimco and Apartment Income REIT Corp. Bloomberg News reported that Westdale Real Estate Investment and Management recently made an unsolicited all-cash takeover offer to the REIT.

IPO world

* Home-rental company Airbnb Inc. set an indicative price range of $44 to $50 per share for its IPO on the Nasdaq stock market, which could fetch a maximum of $2.85 billion.

* CBRE Group Inc.'s blank-check company, CBRE Acquisition Holdings Inc., cut its proposed IPO size to up to 35.0 million so-called SAIL securities from 40.0 million, at a price of $10.00 apiece. Underwriters will have a 45-day option to buy up to 5,250,000 additional SAIL securities.

Cost cuts

* Joseph Macnow, CFO and chief administrative officer of office landlord Vornado Realty Trust, will step down, effective Dec. 31, with President Michael Franco assuming the additional task of CFO. The REIT said it intends to save over $35 million annually through compensation cuts and a 70-person staff reduction.

The comeback

* Pennsylvania Real Estate Investment Trust said the U.S. Bankruptcy Court for the District of Delaware confirmed the landlord's prepackaged financial restructuring plan, paving the way for it to emerge from Chapter 11 in early December. The regional mall landlord said it will have access to $130 million of new financing to support its operations.

Bulk deals

* Hillwood Development Co. sold a 23-property warehouse portfolio covering 14.3 million square feet across the U.S. in an approximately $2 billion deal to Stockbridge Capital Group and South Korea's National Pension Service, The Wall Street Journal reported, citing an unnamed source.

* Private equity giant KKR & Co. Inc. is nearing a deal to buy an approximately 100-property U.S. warehouse portfolio valued at more than $800 million, Bloomberg News reported, citing a person with knowledge of the matter.

* Hudson Pacific Properties Inc. formed a 55/45 joint venture with the Canada Pension Plan Investment Board to buy a 668,000-square-foot trophy office tower in Seattle for $625 million. The 98%-leased property at 1918 Eighth Ave. is anchored by Inc.

* Colony Capital Inc. exited the industrial real estate sector following the completion of the sale of a 51% ownership stake in its bulk industrial portfolio at $400 million in total portfolio value.

Around the world

* Castellum AB CEO Henrik Saxborn reportedly said the Swedish real estate company will proceed with its planned takeover offer for Norwegian peer Entra ASA, which recently decided to reevaluate its property portfolio, expecting to see a higher valuation and a notable rise in its last reported net asset value.

* Private equity and real estate giant The Blackstone Group Inc. is the front-runner to purchase an eight-property industrial portfolio in the U.K. for about £340 million, Property Week reported. According to the news outlet, EPIC UK Ltd. put the 2.75 million-square-foot portfolio up for sale in early November.

* Malaysia-based property company Mulpha International Bhd. and U.S.-based KSL Capital Partners made it to six bidders short-listed for the Travelodge portfolio co-owned by Mirvac Group, which could fetch A$550 million, The Australian Financial Review's Street Talk reported, citing unnamed sources. The portfolio comprises 11 Travelodge-branded hotels across Australia featuring 2,032 rooms.

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