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Pennsylvania REIT, CBL file bankruptcy; American Tower to buy InSite for $3.5B

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Pennsylvania REIT, CBL file bankruptcy; American Tower to buy InSite for $3.5B

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

Vote-counting continued in several contested states in the days after the U.S. presidential election, but there were firm results on several California ballot measures that affect commercial real estate.

Statewide, voters rejected both Proposition 21, which would have allowed local governments to enact rent control on certain properties, and Proposition 15, which would have effectively raised real estate taxes by assessing them based on market value rather than purchase price.

BMO Capital Markets analyst John Kim called real estate investment trusts invested in California multifamily — including Essex Property Trust Inc., Equity Residential and AvalonBay Communities Inc. — winners following the defeat of Proposition 21, though he noted that there could still be other new statewide rent-control measures.

Mizuho analyst Omotayo Okusanya said the defeat of Proposition 15 should remove an overhang on the share prices of office REITs such as Douglas Emmett Inc., Hudson Pacific Properties Inc. and Kilroy Realty Corp., which have high exposure to California, and industrial REIT Rexford Industrial Realty Inc., which is concentrated in the southern part of the state.

In worse news for property owners, Robert W. Baird analysts noted, Proposition I in San Francisco passed, which will double the city's property transfer tax on properties valued higher than $10 million.

More retail fatalities

* Pennsylvania Real Estate Investment Trust filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of Delaware to put into effect a financial restructuring plan to recapitalize and extend its debt maturities.

* CBL & Associates Properties Inc. also filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the District of Delaware to implement a plan that is expected to eliminate total debt and preferred obligations of approximately $1.5 billion.

Heavyweight deals

* Communications REIT American Tower Corp. agreed to buy InSite Wireless Group LLC for about $3.5 billion. InSite owns, operates and manages about 3,000 communications sites, including more than 1,400 owned towers in the U.S. and over 200 in Canada.

* Manufactured-home REIT Sun Communities Inc. wrapped up its approximately $2.0 billion acquisition of Safe Harbor Marinas LLC.

* Ventas Inc. formed a joint venture with Singapore sovereign wealth fund GIC Pte. Ltd. that will initially own four university-based research and innovation development projects that are under development with total estimated project costs of $930 million.

* Americold Realty Trust acquired Hall's Warehouse Corp. for $480 million. The acquired company has a portfolio of eight facilities in northern New Jersey, encompassing 58 million cubic feet and 200,000 pallet positions.

* Griffin Capital Essential Asset REIT Inc. agreed to acquire Cole Office & Industrial REIT (CCIT II) Inc. for about $1.2 billion in a stock-for-stock transaction to create a $5.8 billion diversified, office and industrial net-lease REIT. CCIT II accepted the superior proposal from Griffin and exercised its right to terminate its previously announced merger deal with CIM Real Estate Finance Trust Inc.

* Meanwhile, Cole Office & Industrial REIT (CCIT III) Inc. and Cole Credit Property Trust V Inc. plan to move ahead and close their separate merger deals with CIM Real Estate Finance Trust after CCIT II opted out. The deals are expected to close in the fourth quarter, subject to customary closing conditions.

* The C$4.9 billion sale of Northview Apartment REIT to Starlight Group Property Holdings Inc. and KingSett Capital Inc. completed Nov. 2.

* Resource Real Estate Opportunity REIT Inc. and Resource Apartment REIT III Inc. stockholders will vote on their respective sales to Resource Real Estate Opportunity REIT II Inc. at separate special meetings to be held Jan. 26, 2021.

Impact of the pandemic

* Global commercial real estate investment rose 23% in the third quarter over the previous quarter to $147 billion, CBRE Group Inc. said. The global commercial real estate services and investment firm attributed the rise to effective management of the pandemic. Year over year, the investment volume was down by 48%, while year-to-date global volume is down by 31% from the corresponding year-ago levels.

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

Promising properties

* SL Green Realty Corp. and its partners agreed to sell the 20-story 410 Tenth Ave. office redevelopment in Manhattan, N.Y., for gross consideration of $952.5 million to an undisclosed buyer.

* Nontraded REIT Starwood Real Estate Income Trust Inc. purchased two affordable housing portfolios and an industrial property portfolio for a total of $809.0 million. The transaction included a portfolio of 3,660 units across 28 multifamily communities primarily in Virginia and North Carolina, purchased for $531.3 million, and an affordable housing portfolio of 958 units across four multifamily communities in Jacksonville, Fla., acquired for $113.5 million.

Around the world

* Hammerson PLC sold almost all of its 50% interest in VIA Outlets, a European premium outlet operator, to joint venture partner APG Asset Management NV for €307 million.

* Chinese property giant China Evergrande Group agreed to sell all of its 40.964% stake in Xinjiang Guanghui Industrial Investment (Group) Co. Ltd. to Shenergy Group Co. Ltd. via its Evergrande Group Ltd. unit in a 14.85 billion-yuan deal.

* British oil giant BP PLC is in an advanced stage of discussions to sell its corporate headquarters in London, Bloomberg News reported. The interested party, a company backed by Hong Kong-based department store operator Lifestyle International Holdings Ltd., offered to pay £235 million for the office building.

Earnings call coverage

As the third-quarter earnings season progressed, S&P Global Market Intelligence reporters tuned in to conference calls hosted by some of the larger players in the real estate sector.

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