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Simon amends Taubman merger price; Paramount Group rejects Bow Street offer


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Simon amends Taubman merger price; Paramount Group rejects Bow Street offer

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

Most management teams at hotel real estate investment trusts believe business travel will meaningfully return around April 2021, with most group travel returning in September or October, Stifel analysts wrote.

Based on conversations with executives during Nareit's online REITWorld conference, the analysts said recent positive announcements about coronavirus vaccine development represent an inflection point, removing the executives' worst-case scenario from the range of potential outcomes. Still, lodging fundamentals are expected to stall in the short term during a "challenged" winter, they said.

Nareit is the U.S.-based trade association for REITs and publicly traded real estate companies.

The potential return of group and business bookings, following a widely available vaccine, is likely to be the main driver of hotel performance in the near to medium term, the analysts said.

Hotel transaction markets, quiet for much of 2020, are likely to pick up in the first half of 2021, with owners selling distressed assets first, and higher-quality properties coming to market later, they added.

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A yes and a no

* Simon Property Group Inc. modified certain terms of its merger agreement with fellow regional mall REIT Taubman Centers Inc. under which Simon will now acquire Taubman for $43.00 per share in cash. The modifications were approved by the respective boards of the companies, and the transaction is expected to close in late 2020 or early 2021.

* The board of Paramount Group Inc. unanimously rejected an unsolicited cash buyout proposal from Bow Street LLC to acquire the office landlord's entire outstanding shares for between $9.50 and $10.00 apiece.

Property zone

* Chairman of Brookfield Property Partners LP and Brookfield Property REIT Inc., Ric Clark, partnered with Philip Waterman of Waterman Interests LLC to create WatermanClark, a new real estate investment and operating company that will be focused on commercial real estate, Bloomberg News reported, citing a staff memo.

* SL Green Realty Corp., the National Pension Service of Korea and Hines closed on a $1.25 billion loan for their One Madison Avenue project in New York City.

* Communications REIT Crown Castle International Corp. signed a long-term agreement to lease space to DISH Network Corp. on up to 20,000 communication towers in the U.S. to facilitate DISH's build-out of a virtualized 5G network.

* A joint venture of Bain Capital Real Estate LP and Magnolia Capital Group will invest $900 million in multifamily housing across the U.S. over the next several years. The venture will initially target value-added garden-style properties in the Sunbelt markets.

Entry point

* Madison International Realty Holdings LLC and its affiliates disclosed a 7.07% stake in diversified REIT Mack-Cali Realty Corp. The investors acquired the stake, representing 6,409,183 Mack-Cali common shares, for approximately $120.7 million in open-market transactions.

Post-pandemic recovery

* CBRE Group Inc. said the recovery in the commercial real estate market from the COVID-19-induced dislocation will accelerate in 2021, but some property segments will lag. The report said with the advent of a vaccine for COVID-19, the office, retail and lodging sectors will recover at a slower pace compared to the industrial and data center real estate sectors.

Around the world

* Singaporean real estate group CapitaLand Ltd. plans on growing its new economy assets in China to S$5 billion from S$1.5 billion over the next few years, using a portion of the capital from asset recycling.

* Private equity firm Hillhouse Capital Management Ltd. is close to reaching an over $2 billion deal to privatize developer Soho China Ltd., Reuters reported, citing four people with knowledge of the matter.

* Australian property group Dexus and its Dexus Office Partnership will sell their combined 50% stake in an office tower in Sydney for total net proceeds of A$925 million. The stake will be sold to an unnamed buyer who is an existing co-owner of the property in a deal expected to close in early 2021, subject to approval.

Conference coverage

S&P Global Market Intelligence attended Nareit's annual REITWorld conference, held virtually this year because of the coronavirus pandemic.

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