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Brookfield Property gets $5.9B go-private offer; Amazon pledges $2B to housing

Commercial Real Estate: 2020 Review

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Brookfield Property gets $5.9B go-private offer; Amazon pledges $2B to housing

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

The outlook for the U.S. office market is not significantly clearer in the new year than it was months ago, and a "long, uncertain road" stretches ahead, according to a pair of Baird equity research analysts.

Millions of jobs have been lost in the pandemic, the national office vacancy rate is near 15%, and the amount of sublease space on the market continues to rise, they said. Moreover, there is still a lack of clarity around the long-term impact of coworking and work-from-home trends.

"The bounce-back in Office REITs during 2H20 leaves reduced upside, and discounts to replacement cost suggest only ~10% upside," analysts David Rodgers and Nicholas Thillman said in a Jan. 7 research note, assigning the subsector a "market weight" rating.

The analysts estimated that office real estate investment trusts in their coverage universe are trading, on average, at a 46.0% discount to replacement cost.

"The limited upside ... and fundamental challenges suggest favoring balance sheet strength, larger credit tenants, limited rollover exposure and deeper value," the pair said.

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

Fusions

* Asset management behemoth Brookfield Asset Management Inc. and its institutional partners are proposing to take Brookfield Property Partners LP private by acquiring all of the limited partnership units not already owned in a $5.9 billion deal.

* Shareholders of Front Yard Residential Corp. approved the single-family REIT's merger with Pretium Partners LLC and Ares Management Corp. The merger is expected to complete Jan. 11.

* Temperature-controlled industrial REIT Lineage Logistics LLC acquired Cryo-Trans Inc., which provides refrigerated and insulated railcars and rail management solutions across North America. According to a report by Bloomberg News, the transaction values Cryo-Trans at more than $500 million.

* Wyndham Destinations acquired the Travel + Leisure brand and all related assets for $100 million from Meredith Corp. and said it will rebrand to Travel + Leisure Co. The transaction also includes Travel + Leisure's travel clubs with about 60,000 members.

Property chronicles

* Urban office REIT Alexandria Real Estate Equities Inc. agreed to acquire two buildings and one future development opportunity in the Boston area for $1.52 billion. The properties include a 973,145-square-foot, 93%-occupied class A office/research and development building at 401 Park Drive and a 510,116-square-foot office/laboratory building at 201 Brookline Ave.

* E-commerce giant Amazon.com Inc. pledged more than $2 billion to preserve and create more than 20,000 homes in communities near its headquarters in Puget Sound, Wash.; Arlington, Va.; and Nashville, Tenn.

* Office landlord SL Green Realty Corp. secured a $360 million floating-rate refinancing for its flagship office property at 100 Park Ave. in Manhattan, N.Y., from Aareal Capital Corp., Commercial Observer reported, citing unnamed sources.

* Healthcare REIT Medical Properties Trust Inc. agreed to acquire a portfolio of behavioral health facilities across the U.K. from behavioral health provider Priory Group for about £800 million.

Around the world

* Private equity firm Lone Star is not going ahead with the approximately £3 billion planned sale of London-based residential property company Quintain Ltd., Financial Times (London) reported, citing people with knowledge of the process. Discussions for the sale were abandoned due to the lockdown induced by the fresh spike in coronavirus cases in the country.

* Chinese company Jiangsu Shagang Group Co. Ltd. and other investors are considering the sale, among other options, of U.K.-based data center operator Global Switch Holdings Ltd. in a deal that could value the company at at least £8 billion, Bloomberg News reported, citing people with knowledge of the matter.

* Shanghai Construction Group Co. Ltd. and Shanghai Municipal Investment Group secured a 125,100-square-meter mixed-use site in Shanghai for 17.6 billion yuan, China Internet Information Center reported.

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