Retail landlords unfazed by tenant bankruptcies; Blackstone to sell Hawaii asset

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

Retail property owners remained unfazed by the growing number of retailers filing for bankruptcy as the availability of space remains low, The Wall Street Journal reported.

Years of slow construction activity have helped pushed availability of retail space to near record lows, making it easier for property owners to replace departing clients, often with ones that pay higher rent and have more customers.

Most stores of discount department store Stein Mart have been taken since the company filed for bankruptcy and closed its 280 locations in 2020, according to the report, citing Retail Specialists Executive Vice President Bill Read. More than 40% of the 721 stores closed by Bed Bath & Beyond have been leased in the year since the retailer filed for bankruptcy, Read said.

CHART OF THE WEEK: US REITs' median implied capitalization rate down in Q1

⮞ The median implied capitalization rate for US equity real estate investment trusts slipped 20 basis points quarter-over-quarter to 8.1% in the first quarter.

⮞ A higher implied capitalization rate generally indicates higher risk and higher returns.

⮞ The office sector continued to trade at the highest median implied capitalization rate in the first quarter at 10.5%, down 1.9 percentage points from the previous quarter.

Property lane

– Blackstone Real Estate Income Trust Inc. agreed to sell the 450-room Turtle Bay Resort in Oahu, Hawaii, for $725 million to lodging REIT Host Hotels & Resorts Inc. The sale is expected to close in the third quarter of 2024. The company has owned the property spanning 1,300 acres since 2018. Separately, Blackstone closed the sale of 65 acres of land at Turtle Bay on Oahu's North Shore to Areté Collective.

– EQT Exeter acquired 20 industrial properties in Minneapolis from Prologis Inc. The properties total over five million square feet and are 90% leased by 54 tenants. EQT Exeter also plans to buy four additional properties. The combined sale price of 13 of the properties, which has been made public in real estate filings, is over $257 million, the Philadelphia Business Journal reported.

– A 40-story office building in Manhattan, NY, is on the market for sale with a pricing guidance of around $100 million, The Real Deal reported. Sage Realty Corp. tapped Eastdil Secured to market the half-vacant building at 767 Third Avenue, according to the report.

US hotel performance

US hotel performance was up across three key metrics during the week ended May 25, STR reported, citing data from CoStar, which provides information and analytics on property markets.

Revenue per available room (RevPAR) was $108.73, up 3.9% from the comparable week in 2023. Average daily rate (ADR) rose 2.3% to $160.67 and occupancy improved 1.6% to 67.7%.

Among the top 25 markets, Houston took the top spot for both occupancy lift and RevPAR, while Las Vegas reported the highest year-over-year increases in ADR. Detroit and San Francisco reported the steepest declines in RevPAR.

Click here to see key people moves in North America real estate.

REIT Replay: US REIT indexes down during week leading up to Memorial Day